7 Credit Card Tips To Help You Keep Up With Inflation

Spending on a budget can be difficult at the best of times, but when you’re looking for ways to fight inflation, the task can feel even more impossible than usual.

Millions of Americans turned to credit cards to make ends meet this year. In fact, consumers opened 11.5 million new credit card accounts in the first two months of 2022 alone.

While credit cards can bring needed relief to families struggling under the weight of inflation, credit card debt can quickly spiral out of control.

To prevent your credit cards from squeezing you, make sure you follow these seven crucial credit card tricks.

6 clever ways to smash your debt today

1. Transfer your balance

Do you have more than one credit card? It might be worth looking at each card’s terms, bonuses, and interest rates, and then moving your balance from one card to another.

Keep in mind that a balance transfer can affect your credit score, especially if you’re opening a new account to transfer your existing balance or if you continue to spend on your released older card.

However, if one of your credit cards has a lower APR or better travel rewards that can help you save on gas, the transfer could reduce your debt while freeing up more cash.

2. Open a new account

Maybe your credit card provider worked well for you before the pandemic, but now that prices have skyrocketed, you’re finding that your card’s rewards aren’t enough to offset the high interest rate.

In this case it may be worth transferring your card balance to another bank with better conditions and bonuses.

As mentioned above, this is likely to affect your credit score. You should take the pros and cons of transferring your funds to a new bank very seriously.

If you are about to apply for a loan, avoid opening a new account. You don’t want to decrease your chances of getting a good interest rate or bar yourself from taking out a loan just to get better rewards.

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3. Associate your card with your purchase

Instead of using your credit card to cover all expenses, take the time to decide which card or account to use for different purchases.

If your card only earns cash back rewards on gas purchases, try using that card for gas and your debit card for everything else. If your card earns double reward points when you use it at certain stores, limit your card use to those stores as much as possible.

If you strategize which cards you use for each type of purchase, you can regain some purchasing power. Using one card for everything can leave you in debt at a high APR with no rewards in return.

4. Use cards that reward your shopping habits

Do you spend a large chunk of your monthly budget on grocery shopping? Trying to save money for a big cross-country trip next year? If so, find a credit card that rewards you for spending exactly how you do.

For example, some cards offer cashback on all grocery store purchases. Others will help you earn SkyMiles as quickly as possible.

Finding the right card takes a little research, but it’s worth finding a loan option that makes your biggest expenses a little cheaper.

5. Benefit from your customer loyalty

If you’ve been with the same credit card provider for years, you may be able to use your years of loyalty to your advantage.

Before switching to another credit card, it’s a good idea to ask your current provider if they’d be willing to expand your benefits to keep you as a customer.

They might be willing to offer you double reward points or a lower fee – or you might learn they aren’t worried about losing your business and aren’t interested in negotiating.

Either way, you have nothing to lose by asking, but you could use some relief from the mounting economic pressures.

6. Increase (or decrease) your card limits

Are you charging your credit card more or less than this time last year? Your credit card should be partially customizable to your needs, including your credit limit.

For example, if you know you’ll spend and will spend until your card runs out, talk to your provider about lowering your credit limit so you don’t accumulate more debt than you need to.

If what worked for you last year isn’t working anymore, it might be time for a change.

7. Pay out your balance

A credit card can be a useful, even necessary, financing tool when your budget is tight.

But to fight inflation across the country, the Federal Reserve hiked interest rates. On November 28, 2022, the average credit card interest rate was 19.28%.

If you don’t pay off your credit card debt when it’s due, it doesn’t matter how much cashback you got for your purchases. The interest you owe will far exceed any savings.

bottom line

Depending on the card and your financial situation, a credit card can help you stay ahead of inflation.

These seven crucial tricks can help you make your card work for you and avoid money stress as you weather the inflationary wave of 2022.

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This article 7 Credit Card Tips To Help You Keep Up With Inflation originally appeared on FinanceBuzz.

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