NerdWallet’s Best Credit Card Tips for April 2020
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April looks a lot different this year as we adjust to changes caused by the COVID-19 pandemic. For most, Easter services and Passover Seders will be online gatherings. The IRS tax filing (and payment) deadline has been extended until July. Financial Literacy Month retains its place on the calendar, and its lessons may seem more urgent than usual.
As you adapt to new budget priorities, your credit card can help — and not just by offering rewards or discounts, but also time.
Reevaluate your credit card strategy
When times are tough, look for ways to lower costs instead of stashing away rewards toward travel or other lower-priority goals.
Take inventory of your credit cards and revisit their terms to determine whether you need to manage them differently. Consider the following:
Can you get more value by moving your spending to one of your cash-back or low-interest credit cards?
If you have a general travel credit card, is it possible to redeem travel rewards for cash, even at a lower value? It may be worth exploring.
If you can no longer afford the annual fee on your credit card, will the issuer allow you to downgrade your credit card to avoid it?
Instead of considering a very expensive cash advance, can your credit card’s loan program spare you some fees instead?
Buy time on interest payments
If you’re struggling to pay a credit card bill, you may have options on interest payments.
A 0% intro APR offer: Some issuers may tighten their lending standards during a downturn, but if you can get a 0% introductory offer, it could help you pay down debt or finance needed purchases. Credit cards that offer a 0% intro APR can allow you to keep an emergency fund intact while you pay for certain necessities over time.
When paying off debt is the goal, a balance transfer credit card lets you move high-interest debt to a product with a lower annual percentage rate. The Amex EveryDay® Credit Card is a great choice for balance transfers, but you'll need good or excellent credit to qualify. It has a $0 annual fee, no balance transfer fees for amounts transferred within a certain period and a 0% introductory APR offer: 0% Intro on Purchases for 15 months, and then the ongoing APR of 12.99% - 23.99% Variable APR. Terms apply.
A credit card hardship program: Credit card hardship programs provide assistance to those struggling with financial difficulties resulting from circumstances beyond their control. Given the COVID-19 outbreak, some issuers are offering fee waivers, lower interest payments and other options on a case-by-case basis for customers dealing with hardships. If you plan to pursue this option, be prepared to pick up the phone and wait, potentially for a lengthy period of time.
Get more value on purchases, even as you stay in
It's likely that your expenses have changed as a result of complying with stay-at-home orders or taking other COVID-19 precautions. If you can afford to pay off your credit card in full every month, it's still worth accumulating any rewards it may offer. You could even use the cash points to pad your emergency fund.
groceries
Maybe you’re stocking up on groceries for family members who suddenly find themselves at home all day. Or perhaps you're finalizing last-minute preparations for Easter or Passover. Either way, you can offset some of the costs with a card like the Blue Cash Everyday® Card from American Express, which offers 3% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%); 2% back at U.S. gas stations and U.S. department stores; and 1% back on all other purchases. It has a $0 annual fee. Terms apply.
For Q2 2020, the $0-annual-fee Discover it® Cash Back earns 5% cash back with activation on up to $1,500 in combined purchases at wholesale clubs, gas stations, Uber and Lyft. All other purchases earn 1% cash back. The wholesale category in particular could be beneficial if you're cooking a lot over the next few months and feeding a large family.
Nerdy tip: When it comes to wholesale clubs, Costco accepts only Visa. But Discover is accepted at both Sam's Club and BJs.
Food delivery or takeout
If want to support local restaurants or give yourself a break from the kitchen, you could earn a side of rewards with your next food delivery or takeout order. A foodie-friendly credit card like the $0-annual-fee Capital One SavorOne Cash Rewards Credit Card can offer 3% cash back on dining and entertainment, 2% at grocery stores and 1% on all other purchases. If you’re worried about safety, some restaurants and delivery services are offering non-contact deliveries.
Streaming services
A credit card that earns generous rewards on streaming services might come in handy as households hunker down. The Wells Fargo Propel American Express® card, for example, earns 3 points per dollar spent on things like qualifying streaming services, restaurant purchases and travel (including transportation). Non-bonus-category purchases earn 1 point per dollar. Eligible streaming services include subscriptions like Hulu, Netflix, Apple Music, Pandora, Sirius XM Radio and Spotify Premium. The card has a $0 annual fee.
Tax prep
The tax deadline has been extended until July 15, so you’ll have more time to prepare. If you’re paying for tax preparation services or software, consider whether you can charge it to a flat-rate credit card. The Citi® Double Cash Card – 18 month BT offer, for instance, earns 2% back on purchases: 1% when you buy and 1% when you pay it off. It has a $0 annual fee.
Avoid using a credit card to pay your tax bill unless the rewards offset the cost of the processing fee.
Information about the Amex EveryDay® Credit Card has been collected independently by NerdWallet and has not been provided or reviewed by the issuer of this card.
