Happy New Year! You’ve likely got some financial goals in mind as 2018 gets underway, and the Nerds have credit card tips to help you start off on the right foot.
Looking to save money on interest, earn bonus reward points, better manage your credit card, or score a low airfare? Then let’s get started.
Transfer balances to a low-interest card
In NerdWallet’s 2017 Consumer Holiday Shopping Report, 14% of consumers said in October they hadn’t paid off holiday credit card debt incurred in 2016. And 31% said it took between one to four months to pay it off. If you’re in this situation, consider applying for a balance transfer card with a lower interest rate. Many cards offer lengthy 0% introductory APR periods, which could help you pay off your debt while hitting the pause button on interest charges.
Before you take advantage of a balance transfer offer:
- Determine how much the balance transfer fee will cost. It’s usually 3% to 5% of the amount being transferred.
- Know how long the introductory 0% APR period lasts. Will you be able to pay off the balance before it ends?
- If not, make sure you’re comfortable with the ongoing APR (after the intro 0% offer ends)
Activate your bonus categories
If you have the Chase Freedom® or certain Discover cards, such as the Discover it® Cash Back, you can earn 5% cash back on up to $1,500 spent quarterly in rotating bonus categories (1% cash back on everything else). But a new year means new categories, so don’t forget that you have to opt into them to get the bonus.
Discover’s bonus categories from January through March are gas stations and wholesale clubs. During the first quarter of 2018, the Chase Freedom® pays 5% cash back on purchases at gas stations and with internet, cable TV and phone service merchants, including AT&T, Verizon, Spotify, Hulu and Netflix. Also in the first quarter, Chase Freedom® card holders can earn the 5% bonus if they pay using Chase Pay, Apple Pay, Android Pay or Samsung Pay mobile wallets.
Try ‘autopay and everyday’
Many people make a New Year’s resolution to simplify their life or manage their money better. NerdWallet writer Gregory Karp suggests a good way to accomplish both of these goals: Use the “autopay and everyday” method for credit cards.
Here’s how it works: Use one credit card solely for recurring automatic payments — like utilities or subscription services — and a different card for everyday use. With this method, your “autopay” card is safe at home as it takes care of your important bills. Your “everyday” card is the only one that’s in your pocket and out in the wild. It’ll still be a hassle if the latter card is compromised through theft or fraud, but you won’t have to update multiple autopay accounts with a new card number, and you won’t face any interruptions of crucial bill payments or monthly services.
Save money booking winter vacations
Even though the holidays are over, it’s not too soon to think about booking a winter getaway. And what better incentive than snagging a cheap fare?
Ticket price is the primary consideration for nearly all flyers, according to Tom Spagnola, senior vice president for sales at Fareportal, which operates CheapoAir.com and OneTravel.com. He notes that one of the times where prices are best is right after New Year’s.
“There’s going to be phenomenal fares,” Spagnola says. “On some major airlines, getting to Asia from the East Coast may be cheaper than flying to the Caribbean.”
Spagnola also advises would-be travelers to keep their eyes on the skies for two new low-cost carriers in the market: Air France’s Joon, along with Level, launched under the same company that owns British Airways and Iberia. Both new carriers are specifically targeting a young demographic, Spagnola says.
But, of course, nothing says only young people can enjoy fabulous vacations at low fares. And the right credit card can help.
Spagnola recommends the United℠ Explorer Card for those who fly United, which is on NerdWallet’s Best Airline Credit Cards list. For other travelers, he says, Capital One and Discover “are really doing a tremendous job to attract a consumer who has no [brand] loyalty.”
More about credit cards