Earn 1% or Save 10%

Take out a recent credit card statement which covers a typical month's spending. Look through each item, and ask yourself if you could have either avoided buying any items, got a slightly better deal by shopping around or paying cash, or purchased a smaller and cheaper product instead?

In most cases, you will probably be able to find at least one item that you could have done without, or that you could have paid a bit less for. These are likely to add up to the possibility of saving 5-20 % on an average credit card bill.

Sure, we could all find ways of spending less. The point is that using plastic makes it easier to spend more. A cashback rewards scheme makes it easier still.

In this context, would you rather have 1% cashback, or 10% more cash in the bank at the end of each month?

Bear in mind that once you take out a cashback credit card, you will always be shopping with the thought in the back of your mind that everything you buy will earn you more rewards. This makes it so much easier to spend that little bit extra, to buy more things, or even tip a little bit more generously (although we always suggest tipping in cash, but that's for another article).

Quite often, smaller merchants will offer discounts if you pay for goods in cash rather than using a credit card. This is because of the merchant fees associated with a credit card transaction. For more information on how you may be able to save money by keeping your flexible friend in you pocket, please take a look at our advice article "Cashback costs companies!".

Rewards Schemes - More information on credit cards with rewards such as cashback and airmiles.