NerdWallet’s Best Credit Card Tips for April 2022
By now, your wallet is probably feeling the effects of rising costs of gas, food and other essentials. While you can’t dodge inflation, it’s possible to strategize and keep more money from getting away.
If you celebrate Easter, Ramadan or Passover, or plan on going on spring break, the expenses may be higher this month. As you’re navigating spending in April, credit card rewards and perks may help defray some of the rising costs.
Here are some ways to get more value this month.
Don’t leave any rewards behind
If you’ve got a handle on managing multiple credit cards without taking on debt, use credit cards as budgeting tools. Set spending alerts according to your budget to be aware of when it’s time to stop adding purchases. If the cards earn rewards, assign planned purchases to each one to get the most value. Some of the categories that have seen rising costs include:
Groceries are likely to get even more expensive. Prices for what the Department of Agriculture’s Food Price Outlook calls food at home — purchases at grocery stores and supermarkets — are expected to rise up to 4% in 2022. A credit card that earns rewards on groceries can help you get some money back on purchases.
Depending on how much you spend per month, it’s worth paying attention to any caps or spending limits on a credit card. For instance, the $0-annual-fee Citi Custom Cash℠ Card earns 5% cash back on up to $500 in your top spending category among a list of 10 options, including groceries. If it’s only used for groceries, though, and you spend $500 or less during each billing cycle, that’s up to $25. As long as you’re getting something back for your purchase, you won’t leave money on the table.
Gas or transit
Drivers and commuters on public transportation can earn rewards on their daily rides with the right credit card. It’s one way to make up for rising costs.
A card like the Blue Cash Preferred® Card from American Express can be a good pick because it earns rewards in many categories that have seen price increases. It gets 6% cash back at U.S. supermarkets, on up to $6,000 a year in spending (then 1%); 6% cash back on select U.S. streaming subscriptions; 3% cash back at U.S. gas stations and on transit (including such things as taxis, rideshares, parking, tolls, trains and buses); and 1% cash back on all other purchases. Terms apply. The ongoing annual fee ($0 intro for the first year, then $95) would also pay for itself if you spend at least $31 at the supermarket every week.
If an annual fee isn’t for you, the Blue Cash Everyday® Card from American Express is this card’s $0-annual-fee sibling. It offers decent rewards at a lower cash-back rate: 3% back at U.S. supermarkets on up to $6,000 spent per year, 2% back at U.S. gas stations and select U.S. department stores, and 1% back on all other purchases. Terms apply.
Free up some money with your credit cards
If you use credit cards strategically by paying them off in full to avoid interest charges and making use of their perks, it’s possible to come out ahead. Consider whether your credit cards offer any of these options:
Many major credit card issuers have card-linked offers that give you discounts or additional rewards on purchases. Look for discounts or rewards on planned purchases for big value.
Log in to your account or call the credit card issuer to learn more about your card’s benefits. An issuer may offer benefits that save money like cell phone protection or exclusive discounts through the credit card’s network.
A benefit like cell phone protection can give you back some money to put toward groceries or gas, for instance. It’s potentially a nice chunk of change if you’re already paying for coverage on multiple lines. As long as the cell phone bill is paid with the card that offers the benefit and other terms are met, you may qualify for coverage.
The $0-annual-fee Wells Fargo Active Cash® Card, for example, offers cell phone protection insurance (up to $600, for up to two claims per 12 month period) for a damaged or stolen device. Read the terms carefully to understand what’s covered.
A balance transfer
Regardless of whether interest rates continue to rise, it’s important to be on track toward paying off debt as quickly as possible. Of course, it’s a lot harder to do when prices are rising left and right, but a balance transfer offer on a credit card can put interest payments on hold to help pay off debt faster.
With good credit (a FICO score of 690 or higher), a balance transfer credit card like the $0-annual-fee Wells Fargo Reflect℠ Card can be an excellent get-out-of-debt tool. It allows you to move debt from a high-interest credit card onto it to get a lower interest rate. Cardholders get a 0% intro APR for 18 months from account opening on purchases and qualifying balance transfers, and then an ongoing APR of 13.24%-25.24% Variable APR. Intro APR extension of up to 3 months with on-time minimum payments during the intro and extension periods. You’ll have to pay a 3% fee for every balance transferred, but it’s worth paying if it accelerates your debt-payoff journey and saves on interest payments over time.
Nerdy tip: In some cases, you may not need to apply for a new credit card to get a balance transfer. Offers from current credit card issuers may be sitting in your email inbox or account. If you have two or more credit cards that are piling on debt, you can use that offer to transfer balances from different credit card issuers to get a lower interest rate. Choose the offer with the lowest fee that makes it possible to transfer the most debt. Stop using all credit cards to pay off debt quickly.
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