How credit cards can help you save money?

Before diving into how credit cards can help you save money, it’s important to understand—

How Credit Cards Work?

A credit card lets you borrow money up to a set limit for making purchases or taking out cash. Unlike debit cards, which use money from your bank account, credit cards allow you to borrow from a bank or company and pay it back later. This borrowing is often interest-free if you repay the full amount within 20 to 50 days (grace period), depending on the card issuer's terms.

How Credit Cards Can Help You Save Money?

Credit cards aren't just for spending—they can actually help you save money when used wisely. Here's how:

1. Cashback Rewards

Many credit cards offer cashback on specific purchases, like groceries, fuel, or online shopping. 

2. Reward Points

Credit cards often let you earn points on every transaction, which can be redeemed for discounts, travel, or gift vouchers.

3. Discounts and Offers

Many cards provide exclusive deals, such as discounts on shopping, dining, or entertainment.

4. Zero-Cost EMIs

Some cards allow you to convert high-value purchases into no-cost EMIs, which spread the payment without additional interest.

5. Fuel Surcharge Waivers

Certain cards waive the surcharge typically applied to fuel transactions.

6. Travel Benefits

Some credit cards offer benefits like free lounge access, travel insurance, and discounts on flights or hotels.

Credit cards can be powerful financial tools to save money, but only if you use them responsibly. 

Types of Credit Card

Remember a one size fits all approach doesn't work on credit cards!

If you want to make the best of benefits and rewards on your credit card you need to choose a card based on your spending patterns.

Here are 8 different types of Credit Cards based on rewards and benefits:

Example

Meet Prabhas, an engineer from Mumbai, who earns ₹14 lakhs annually and has diverse expenses.

He realised he is eligible for the Tata Neu Infinity Card which can help him save more through partner rewards at all Tata brands like Taj hotels, 1 Mg, Croma, Bigbasket and Westside.

Card Features:

• No joining fees
• 5-10% Neu coins on shopping at partner stores online/offline
• 1.5% Neu Coins on UPI spends using card  
• 8 Domestic Airport Lounge Access / Year
• 4 International Airport Lounge Access / Year

*1 Neu coin = ₹ 1

Here’s how his expenses and rewards turn out after a year:

Prabhas earns rewards worth ₹74,000 which he can redeem at partner brands anytime and save money on future expenses. Plus, he gets free airport lounge access for his flights, saving ~₹2,000 per visit, an extra ~₹16,000 saved annually.

That means Prabhas saved ~10% on his ₹10 lakh regular expenses, just by paying smartly with his credit card!

So, now the question arises—

Should you get a Credit Card?

A credit card can be a valuable tool if you use it the right way. It helps you build a credit score, earns you rewards like cash back or discounts, and gives you 20-50 days of interest-free credit—essentially free borrowing for that period.

But, it’s not free money!

If you don’t pay the full amount by the due date, interest rates as high as 30-40% annually will apply.

To use a credit card effectively:

• Only spend on things you can afford with money already in your bank account.
• Stick to planned expenses like groceries, travel, or bills to earn extra rewards.

A credit card is a smarter way to pay, not an excuse to overspend. Be disciplined, and don’t use it as a shortcut to exceed your budget.