(NerdWallet) – As the prices of goods and services continue to rise due to inflation, cutting spending isn’t the only way to free up cash for basic needs.
Credit cards can provide valuable benefits to first-time applicants, whether your goal is to pay off debt or save costs. Even if you already have a card, you may be sitting in on targeted offers, rewards, or perks that could make a difference.
Here are some ways to maximize the value of a credit card.
1. Introductory offers
If you have good credit (a FICO score of 690 or higher) and a big expense coming up, consider financing it with a credit card that offers an introductory 0% APR on purchases and a bonus registration. As long as you pay off the balance, you’ll save on interest charges and potentially recoup some of the cost of the purchase with this bonus.
If you have good credit but want to pay off existing debt, a balance transfer credit card can reduce costs. It allows you to transfer high-interest debt from another issuer and pay it off at a lower interest rate, ideally at 0% APR for a period of time.
“There is going to be a [balance transfer] costs, so you have to go around many times,” says Melissa Cox, certified financial planner and advisor at Fetterman Investments, a Dallas-based financial planning firm.
Aim for a fee of 3% of the transferred balance or less. Compare these fees with the cost of long-term interest payments on your current card to determine which option saves the most money. If balance transfer makes sense, make a plan for it.
“If you know the transfer will happen six months before the interest starts to kick in, you want to have a plan to pay off as much of that debt over those six months,” Cox says.
You can usually find promotional periods for balance transfers that last less than two years. And you might not need to apply for a new credit card to get such an offer; some card issuers offer targeted balance transfer offers to existing cardholders.
2. Buy now, pay later
Some major issuers have built-in “buy now, pay later” options on their credit cards that allow you to pay for eligible purchases in installments for a fixed fee or interest rate.
The predictability of these types of payments can make it easier to budget for them, and such plans could save you money if their fees or interest rates are cheaper than your card’s normal APR. The plans don’t require a credit check, and you can usually still earn rewards on purchases if the card offers them.
3. Rewards on purchases
A credit card that offers a 2% reward rate on all purchases — or 3% or more in specific categories — can help ease the pain of rising prices.
For example, let’s say you spend $500 a month at the supermarket. A credit card that earns 5% on groceries could earn you $25 in rewards every billing cycle. Over the course of a year, it adds up.
If your current credit card lacks rewards for frequent spending categories like gas, restaurants, or groceries, consider one that better matches your spending.
4. Merchant Specific Discounts
Some major credit card issuers offer discounts or discounts when you use a credit card to make purchases from specific merchants in categories like everyday shopping, gifts, and travel. These unique offers can be found in your account or email, and you normally need to “activate” them or add them to your card.
You’ll get more value if the qualifying credit card also earns rewards on the purchase.
Money-saving benefits like cell phone insurance can be in your wallet. You can get coverage for damaged or stolen devices up to a maximum amount when you use cards with this benefit to pay the monthly bill. There is usually a small deductible and conditions generally apply.
For Tony Florida, the primary account holder of his family cell phone plan, the savings from cell phone protection on his credit card add up. If he paid his cellphone provider for protection, it could cost $14 or more per device per month. Cell phone repairs can also be expensive. When his sister dropped her phone and broke it, he filed a claim using his card benefit, paid the deductible and was reimbursed.
“They just gave me credit for the estimated cost of the phone,” says Florida, who is also a content creator for YouTube channel Thrifty Tony. “It was like over $500 that they refunded us.”
The claims process is a bit clunky, according to Florida, but he says it’s still worth it since you’re not paying extra money for this benefit.
If your card does not have this advantage, it may have others. For example, you may qualify for price protection, which refunds the difference in price of a found item advertised at a lower price elsewhere. To find out about the advantages offered by your credit card, contact the issuer or log in to your account.
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