Fighting inflation often comes with recommendations to cut back on your spending. But what if there isn’t room to cut back? The military lifestyle can present financial challenges and costs that don’t leave any room for cutting back, and at the same time, costs for basic items keep increasing. The answer may already be in your wallet: your credit cards. By carefully evaluating how you spend money, you can choose cards that offer the maximum rewards and cash back for the things you spend your money on.
There are many credit cards to choose from, and picking the one that has perks and privileges that fit your lifestyle is key. “With so many credit card products to choose from, it can be tough sometimes to really know where to begin,” said Elly Szymanski, assistant vice president of credit card products at Navy Federal Credit Union. “I’d recommend reviewing your spending habits to see where you spend the most of your money. After you’ve done that, then look for a card with a rewards or loyalty program that matches those spending habits.” Be sure to check and compare interest rates as well to ensure you are maximizing your savings.
Take Advantage of Sign-up Bonuses, but Be Careful
Introductory offers are a great way to get a windfall of points you can use for retail, travel or even cash back. Look for a card that fits your spending habits, but then carefully read the fine print. Introductory offers can look great upfront, but are usually for a certain period of time, and you may find yourself earning less points per purchase or find your interest rate has gone up after the introductory offer ends.
Use Different Cards for Different Things
If you have more than one credit card, be sure they aren’t all earning the same type of rewards. You can choose a card that offers the maximum benefits for food and entertainment and use it for groceries and dining out and have another card that has a better rewards system for travel or a cash-back plan.
For example, if groceries and gas are your biggest expense, the Navy Federal More Rewards American Express® Card offers three times the points at restaurants and food delivery, three times the points at supermarkets and three times the points on gas and transportation.
If earning cash back is your priority, a cash-back card like the Navy Federal cashRewards Card earns up to 1.75% cash back on every purchase, so you may be spending but you are also earning at the same time.
If traveling is important to you, many cards offer points for flights, car rentals, hotels and upgrades that can reduce the cost of your vacation. Some credit cards also offer statement credits for Global Entry, TSA Pre✓® or travel insurance.
Find the Hidden Benefits of the Cards You Already Have
Reviewing the benefits of the cards you already had could reveal cost savings you didn’t know you were able to use. Programs like purchase protection, free price-matching services, extended warranties and free subscriptions can save you money every month. “If your card issuer has an online shopping portal, opt to shop through it to earn bonus points beyond what you’d get for purchasing in-store or from a retailer’s website,” said Szymanski. “For example, our members can earn up to 15 times the points or 15% cash back at over 900 merchants by shopping through Navy Federal Member Deals.”
Transfer Balances to a New Card
If you have a card that isn’t working for you or providing the benefits you need, a transfer to a new card can be the answer and allow you to pay down debt. Just be sure to check for any balance transfer fees; The best balance transfer cards, like the Navy Federal Platinum Card, have no balance transfer fees. You also want to check to see whether the card has a low intro APR and a low APR after the intro expires periods.
“By consolidating balances from one or more high-interest cards onto a lower-interest credit card, it allows you to more easily pay down debt or manage your monthly payments,” said Szymanski. “First, though, make sure you have a payoff strategy in place as it’ll give you a good idea of how long you need the promotional APR to last.”
Once the balance transfer is complete, always make your payments on time or you could be hit with a penalty APR and miss your goal of becoming debt-free. If possible, set up automatic payments along with text alerts on your mobile device to guarantee on-time payments.
Making the most of your credit cards and their rewards, alongside other strong financial habits like keeping emergency savings, can help you stay on track even if inflation throws you a curveball.
Navy Federal Credit Union is federally insured by NCUA.
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