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3 Types of Cards That Can Help You Ride Out a Crisis
Dealing with an abrupt, damaging financial event like a cut in your working hours is difficult enough. Doing so in the middle of a global pandemic, as new cases of COVID-19 emerge daily and major U.S. cities essentially shut down, can be overwhelming. But if that’s where you are now, or fear you soon could be, using your credit cards strategically could help you get through.
To be sure, credit cards come with their own costs, risks and limitations - any debt eventually has to be repaid, so they’re not a solution to a permanent loss of income. But, they can be an accessible way to ride out the storm while keeping costs low and can even reward you with cash back or bonus points as you spend.
#1: Balance Transfer Cards (see options)
When you’re paying down debt, interest rates matter – a lot. For example, compare the differences between paying down a $10,000 debt on an 18% APR card and a 0% balance transfer card. Using the balance transfer card could save you around $1,431, even after paying a transfer fee of $300. Want to save even more? Sign up for a card that doesn’t charge a transfer fee. As a heads up, the amount you may qualify to transfer and save depends on a variety of factors including your credit worthiness.
#2: Cash Back Cards (see options)
Cash back is the most flexible of all credit card rewards. Instead of points that you have to figure out how to redeem — and that you might not be able to redeem for something you want — you get real dollars and cents you can use for, well, anything. Depending on the card you use and where you use it, you'll earn cash rewards of 1% to 6% of the amount of each transaction. Some cards pay a single, flat rate on every purchase, while others pay higher rates in specific categories and a lower rate on everything else.
#3: Rewards Cards (see options)
These cards typically have higher APRs, but offer larger sign-up bonuses and give you points, miles or cash back on every dollar you spend. Rewards credit cards come in two main varieties: cash-back cards and travel cards. Cash-back cards pay you back a percentage of the amount of each transaction. Travel rewards credit cards give you points or miles for each dollar you spend; you redeem those rewards for free flights, hotel stays and more. No single rewards card is right for everyone. It's all about how you spend money and what kind of rewards you value.
To be sure, credit cards come with their own costs, risks and limitations - any debt eventually has to be repaid, so they’re not a solution to a permanent loss of income. But, they can be an accessible way to ride out the storm while keeping costs low and can even reward you with cash back or bonus points as you spend.
#1: Balance Transfer Cards (see options)
When you’re paying down debt, interest rates matter – a lot. For example, compare the differences between paying down a $10,000 debt on an 18% APR card and a 0% balance transfer card. Using the balance transfer card could save you around $1,431, even after paying a transfer fee of $300. Want to save even more? Sign up for a card that doesn’t charge a transfer fee. As a heads up, the amount you may qualify to transfer and save depends on a variety of factors including your credit worthiness.
#2: Cash Back Cards (see options)
Cash back is the most flexible of all credit card rewards. Instead of points that you have to figure out how to redeem — and that you might not be able to redeem for something you want — you get real dollars and cents you can use for, well, anything. Depending on the card you use and where you use it, you'll earn cash rewards of 1% to 6% of the amount of each transaction. Some cards pay a single, flat rate on every purchase, while others pay higher rates in specific categories and a lower rate on everything else.
#3: Rewards Cards (see options)
These cards typically have higher APRs, but offer larger sign-up bonuses and give you points, miles or cash back on every dollar you spend. Rewards credit cards come in two main varieties: cash-back cards and travel cards. Cash-back cards pay you back a percentage of the amount of each transaction. Travel rewards credit cards give you points or miles for each dollar you spend; you redeem those rewards for free flights, hotel stays and more. No single rewards card is right for everyone. It's all about how you spend money and what kind of rewards you value.
Balance Transfer
![[object Object] card art](http://www.nerdwallet.com/cdn-cgi/image/width=1800,quality=85/cdn/images/marketplace/credit_cards/cb1d60ff-bf72-4b4e-b702-2aa42ba59d40/4e585e79721b2c457eed148274aec435e0970ceb097fd5de32d49f615b012a1c.jpg)
Great for: Long 0% interest periods for balance transfers
Securely with Citibank
Annual Fee
$0
Balance Transfer Fee
3% of each balance transfer; $5 minimum.
Intro APR
0% intro APR on Purchases and Balance Transfers for 18 months
Ongoing APR
14.74% - 24.74% Variable APR
Recommended Credit Score
690 - 850
Good - Excellent
Cash Back
![[object Object] card art](http://www.nerdwallet.com/cdn-cgi/image/width=1800,quality=85/cdn/images/marketplace/credit_cards/2a5d5681-8a3b-4e4c-9509-7476a4d3290d/8343177d6df9e9faa255320e3293cdac3d67b0adacaa919652391c599278f472.jpg)
Great for: Flat Rate Cash Back
Securely with Citibank
Annual Fee
$0
Rewards Details
Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
Intro APR
0% intro APR on Balance Transfers for 18 months
Ongoing APR
13.99% - 23.99% Variable APR
Recommended Credit Score
690 - 850
Good - Excellent
Rewards
![[object Object] card art](http://www.nerdwallet.com/cdn-cgi/image/width=1800,quality=85/cdn/images/marketplace/credit_cards/84e1494c-bae2-4b0d-ac8d-e8c095ceb2fe/95f4b4eef72766c5ec9e6535530b866e39a210342ef0541cf276c9b8c0f6f01b.jpg)
Great for: Cash-Back Pairing with Chase Sapphire Preferred®
Securely with Chase
Annual Fee
$0
Rewards Details
Earn 5% on travel purchased through Chase, 3% on dining at restaurants and drugstores, and 1.5% on all other purchases.
Intro APR
0% intro APR on Purchases for 15 months
Ongoing APR
14.99% - 23.74% Variable APR
Recommended Credit Score
690 - 850
Good - Excellent
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