Fighting inflation often goes hand in hand with recommendations to cut back on spending. But what if there’s no room to make cuts? The military lifestyle can present financial challenges and costs that leave no room for savings, and at the same time the cost of essential items is constantly increasing. The answer may already be in your wallet: your credit cards. By carefully considering how you spend money, you can choose cards that offer the maximum rewards and cashback for the things you spend your money on.
There are many credit cards to choose from, and it’s crucial to choose the one that offers perks and privileges that fit your lifestyle. “With so many credit card products to choose from, it can sometimes be difficult to really know where to begin,” said Elly Szymanski, associate vice president of credit card products at Navy Federal Credit Union. “I would recommend reviewing your spending habits to see where you’re spending the most money. After that, look for a card with a rewards or loyalty program that fits those spending habits.” Also, check and compare interest rates to make sure you’re maximizing your savings.
Take advantage of sign-up bonuses, but be careful
Introductory offers are a great way to earn points that you can use towards retail, travel, or even cashback. Look for a card that fits your spending habits, but then read the fine print carefully. Introductory offers can look good upfront, but they’re usually for a set period of time, and you may find that you earn fewer points per purchase or find that your interest rate went up after the introductory offer ended.
Use different cards for different things
If you have more than one credit card, make sure they don’t all receive 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 restaurants, 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 expenses, 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 cashback is your priority, a cashback card like the Navy Federal cashRewards Card gives you up to 1.75% cashback on every purchase, so you can spend while making money at the same time.
If travel is important to you, many cards offer points for flights, car rentals, hotels, and upgrades that can lower the cost of your vacation. Some credit cards also offer Global Entry, TSA Pre✓®, or travel insurance billing credits.
Find the hidden benefits of the cards you already have
Reviewing the benefits of the cards you already have could reveal cost savings you didn’t know you could take advantage of. Programs like buyer 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, choose to shop there to earn bonus points beyond what you would get for shopping in-store or on a retailer’s website,” Szymanski said . “For example, our members can earn up to 15x the points or 15% cashback at over 900 retailers by shopping through Navy Federal Member Deals.”
Transfer funds 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 off debt. Just make sure you check the fees for transferring the funds. The best prepaid transfer cards, like the Navy Federal Platinum Card, have no prepaid transfer fees. You also want to check if the card has a low introductory APR and a low APR after the end of the introductory period.
“By consolidating balances from one or more high-yielding cards onto a lower-yielding credit card, you can more easily pay off debt or manage your monthly payments,” Szymanski said. “But first, make sure you have a withdrawal strategy in place as it will give you a good idea of how long you’ll need the promotional APR.”
Once the balance transfer is complete, always make your payments on time or you could be hit with penalty interest and miss your goal of getting out of debt. If possible, set up automatic payments along with text notifications on your mobile device to ensure on-time payments.
Making the most of your credit cards and their rewards, along with other strong financial habits like holding emergency savings, can help you stay on track even when inflation is struggling.
The Navy Federal Credit Union is insured federally by the NCUA.
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