- Date : 23/10/2022
- Read: 3 mins
Ways to increase investments with credit cards
Credit cards are one of the most rewarding ways to transact. They allow you to transact on credit and then pay the aggregate bills at a later date. Moreover, the reward program offered by credit cards helps you get attractive deals on every transaction. Other privileges on the card, like free memberships, airport lounge access, etc., add icing to the cake. That is why credit cards are quite popular among individuals.
Furthermore, by using your credit card wisely, you can save more. Additional savings can be converted to additional investments which add to your portfolio. Here are some tips on how you can save more and boost your investments with credit cards –
Credit cards are tied-up with various merchants who offer attractive discounts when you transact with them. Thus, you can explore the discounts that your card offers and then shop at the partnered merchants to save on the overall bill.
As you rack up discounts on your transactions, you can save a part of the bill and enhance your disposable income.
If you have a cashback credit card, you will get cashbacks on various transactions. For instance, many credit cards offer cashbacks on the purchase of mobile phones, electronics, home appliances, etc. Moreover, you might get cashbacks on the aggregate value of your transactions in each billing cycle.
These cashbacks equal savings, and as your savings increase, you can invest them in different avenues, like SIPs or recurring deposits and enhance your investments.
Reward points are common across most credit cards. You are allowed rewarded points on every transaction. For instance, you can earn one reward point for every Rs.100 spent on the card. Moreover, for some transactions, you might get accelerated (higher) reward points. For instance, you might get 5 reward points for every Rs.100 spent on online transactions.
These reward points keep accumulating and offer you the option to redeem them on a wide variety of merchandise. You can also opt for gift coupons that help you cut down on your shopping bills. Some credit cards also allow you to turn your reward points into cash or pay your credit card bills with the points. In these instances, too, you end up saving money, and as you know, as savings increase, so can your investments if you invest the saved amount.
Travel-related credit cards offer discounts on air travel and hotel accommodations. These discounts can help in cutting down your travel expenses and saving money.
All the tips mentioned above point to one common goal – enhanced savings. Enhanced savings increase your disposable income and allow you to save more. Thus, credit cards indirectly contribute to enhanced investments, provided you channel the savings into investment avenues.
So, if you have a credit card, understand the rewards program and the benefits that it offers. Then, maximize the available benefits to enhance your savings. If you don’t have a credit card, apply for one and use it to enhance your savings and also to build up your credit score with regular repayments.