These days, it’s not too often that the terms “frugal” and “credit cards” appear in the same sentence. There are stories about people who carry large balances on their credit cards and then end up paying a large amount of interest in the process. Other stories focus on the cardholder who missed a payment or two and then got hit with a higher interest rate and/or other fees.

But there are still plenty of ways to save money and even earn additional cash, rebates or rewards with credit cards. Responsible credit card use coupled with smart credit choices can combine to produce outcomes that would please even the most frugal amongst us.

Often, credit card reward programs are only truly worthwhile when a cardholder consistently pays his or her entire balance each month. If a balance is consistently held month-to-month, interest charges can quickly add up and can offset cash rebates or other rewards that are accumulated. That said, here are some types of credit cards that can help you save - or even earn - money in the long run.

Cash back credit cards
Cash back (or cash rebate) credit cards allow cardholders to accumulate cash rewards by making purchases with the card. Cash rewards are often redeemed in the form of a check, a statement credit, gift cards and more.

Airline mile and travel reward credit cards
This type of credit card has a reward program that is focused on travel. Rewards earned with this type of card can often be redeemed for free flights, flight rebates or other travel discounts

Credit cards with general (points) reward programs
With this type of credit card, cardholders accumulate reward points by making purchases with the card, which can then be redeemed for a variety of products and services (not limited to one category).

Credit cards with low balance transfer rates
If you are currently carrying a balance on one or more credit cards, transferring the existing balance(s) to a credit card with a low interest rate on balance transfers can help you to save money.

Pre-paid cards
Using pre-paid debit cards instead of traditional credit cards guarantees one thing - you will avoid paying any interest charges on purchases made with the card. You can only spend up to the amount that is pre-paid on the card, so it is not possible to pay interest on an outstanding balance. That doesn’t mean that you can’t be hit with other fees (activation fees, monthly fees, ATM fees, etc.) when using pre-paid cards, though, so be sure to know the terms and conditions of your prepaid debit card before using it.

If you are unsure of where to start you search process, you can sort credit card offers by reward category, sort by credit rating, or you can also sort offers by bank or issuer. Make use of our extensive knowledge base to help you make your next credit decision a knowledgeable one.

Posted in Credit Cards, Personal Finance

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This entry was posted on Friday, November 30th, 2007 at 7:06 am and is filed under Credit Cards, Personal Finance. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.