3 Ways My Credit Card Saves Me Money

Don't assume credit cards always cost you.

When it comes to credit cards, many people focus on the negatives -- including the fact that interest charges on most cards are very high. This is indeed a huge downside, but only if you carry a balance.

If you pay off your card in full each month and don't owe interest, credit cards can actually be a great thing for your finances. In fact, there are three important ways my own cards end up saving me money over time.

1. Cardholder perks help me avoid incurring costs

Some of the perks my card credit offers allow me to avoid spending money on other things. For example, while I might normally purchase rental car or travel insurance when going on a trip, my card offers both of these types of protections. As a result, I get to save money on other travel-related expenses thanks to the card in my wallet.

2. Purchase protections protect my expensive items

Purchase protections that my card offers are also huge cardholder perks that save me a ton of money.

See, my card offers coverage for damage or theft of items within the first 60 days after I buy them. So, if I drop my cell phone or my laptop is stolen, I know I can count on my credit card to cover the costs. While I haven't had to use this yet, thank goodness, it gives me peace of mind knowing I have this protection in place in case I need it.

My card also doubles the manufacturer's warranty on purchases I make. The fact my card provides an extended warranty allows me to avoid buying the one that stores try to sell. Those extended warranties that stores offer can be expensive and often have coverage limitations that make them a rip off.

I don't have to worry about deciding whether to go without protection or pay an added cost for a warranty that isn't that great since my card protects me. And, this has actually come in handy for me on a dishwasher that broke in year two, so I saved money with my card company paying for repairs of the faulty appliance.

3. Cash back reduces cost of purchases

Finally, one of the biggest and most obvious ways my card saves me money is by providing cash back. I actually have several different cash back rewards cards, including one that provides 5% back at my favorite online store as well as another that provides 2.6% cash back on every purchase I make (thanks to my participation in the card's loyalty program that offers bonus cash back).

Being able to get back so much money for each transaction makes everything I purchase a lot cheaper. I end up effectively saving hundreds of dollars every year on my purchases when my card company provides cash back that I can redeem into an investment account or as a credit against future purchases.

With these three generous perks, my cards have paid off for me many times over. Because of these cardholder benefits, I charge every single purchase that I make, and I would never give up using my cards for my everyday spending.