8 Ways to Save Money on Credit Cards

I've always followed the adage that if you need to pay for it with a credit card, you don't need it. (This was after I managed to dig myself into a credit hole during college. I've since wizened up.) That said, there are ways to use credit cards to your monetary benefit. Here are a few tips on how to save money (and even gain a bit of that money back, as well as other perks) if you choose to use credit cards:

1. Shop around. In order to get the best rate, the best rewards program, in short, the best card for you, shop around to sites like bankrate.com or creditorweb.com. MSN's Money Central also has a list of the credit cards with the best rates. Simply returning a pre-approval you received in the mail without doing any comparison shopping is not the best way to make your card work for you.
2. Look for no-fee credit cards.  You can often save between $25 and $50 a year by using a card that does not charge an annual fee. Be sure that the other terms and conditions are worth it, however; it would make no sense to have a card with a higher interest rate (that may end up costing you an extra $25 or $50 a month, or more) or shorter grace period just to save $25 a year.
3. Read the terms. Never sign anything, credit card applications included, without reading the fine print. Most credit cards do not include terms longer than a page, and since this is where every nitty gritty detail of how and when you will be charged is spelled out, well worth your time to read.
4. Negotiate the rate. Once you've been a good customer (read: no missed or late payments) for a few months, contact your creditor. Most will work with  you, potentially saving a point or two on your interest, which can spell big bucks in the long run.
5. Make payments on time. This is HUGE. Even one late payment can cause your interest rate to skyrocket (again, this is where reading and understanding the card's terms comes in handy). In your terms it will be detailed when payments are due, what your grace period is, and how much your interest rate can be affected by late or missed payments. Be sure to schedule payments or mail them in plenty of time, because credit card companies simply don't care if your payment was held up by the post office. Late is late (and missed is missed). It will also be noted on your credit report, making future lines of credit more difficult (and costly) to get.
6. Pay off higher interest cards first. If you have more than one credit card, pay as much as you can toward the one with the highest interest rate while making the minimum payment to the others.  Once the card with the highest rate has been paid off, do the same to the card with the next-highest interest rate, and so on. 
7. Pay your balance in full each month. Though most of us carry credit cards as insurance, a "just in case" solution, it is best to pay your balance in full each month. The interest charged on credit cards is higher than just about any other type of loan. If you know you will be making a large purchase, consider taking out a bank loan instead of charging it on your credit card.
8. Use rewards to your advantage. Rewards, well, reward you for using a particular card. Frequent flyer miles and cash back are two common rewards, and can be quite nice if you use the card correctly. First, scout out the card with the rewards programs that fits your needs (for example, if you rarely travel, frequent flyer miles most likely won't entice you). Second, understand that credit cards with rewards programs often have a higher interest rate than other cards (to offset the cost to the company of the rewards you are getting). Third, you might want to have a second credit card with a lower interest rate (and no rewards program) for larger purchases that you will not be able to pay off at the end of the month. That said, If you pay your balance in full at the end of each month and charge a lot, getting some of your hard-earned money back through rewards is a great boon. Cardweb.com is a great resource for researching cash-back cards.

Choosing to use credit cards is a personal choice, but one that many of us make at some point in our lives. Using credit cards wisely can help you save money on what are traditionally high-interest and expensive.