Inflation, the persistent increase in the prices of goods and services over time, can take a toll on our budgets and financial stability. However, it’s important to note that credit cards, when used strategically, can actually help you save money and combat the effects of inflation. While credit cards are often used improperly, leading to debt, financially-savvy individuals have discovered ways to leverage credit cards to their advantage and protect their finances in the face of rising prices. Follow along to learn the strange secret to how to use a new credit card to offset inflation.
Credit Cards Can Actually Help You Save Money
Contrary to popular belief, credit cards can be a valuable tool in your fight against inflation. By understanding how to use them wisely, you can take advantage of various features that offer savings.
Credit cards offer convenience and security, allowing you to purchase without carrying cash or exposing your bank account information. They also allow you to earn rewards, such as cash back, points, or airline miles, for your everyday spending. Using credit cards strategically and responsibly can maximize these rewards and reduce expenses.
Let’s explore three effective strategies to help you save money with credit cards.
1. Cash Back Credit Cards
Cash back credit cards are popular for those looking to combat inflation and save money. These cards typically offer a percentage of your purchases as cash rewards, allowing you to earn money while you spend. You can accumulate cash rewards over time by using these cards for your everyday expenses, such as groceries, gas, and dining.
This extra money is a valuable tool in fighting inflation, as it provides a financial buffer and helps offset the increased costs of goods and services. When considering cash back credit cards, comparing their features and reward structures is important. Look for cards that offer higher cash back rates on categories that align with your spending habits.
Some cards may provide higher grocery rewards, while others offer more cash back on travel or entertainment expenses. By selecting the right cash back credit card and using it strategically, you can make every purchase work in your favor and effectively fight inflation on your budget. Let us look at the four best credit cards that offer excellent features.
Cash Back Credit Card Examples
Credit Card | Rewards Rate | Annual Fee |
Blue Cash Preferred® Card | 6% cash back at U.S. supermarkets (on up to $6,000 in annual purchases, then 1% cash back after that) | $95 |
Citi Custom Cash℠ Card | 5% cash back in your top eligible spending category every monthly billing cycle (up to $500 in purchases, then 1% after that) | $0 |
Chase Freedom Flex℠ | 5% cash back on activated bonus category purchases each quarter (on up to $1,500, then 1%) | $0 |
Discover it® Cash Back | 5% cash back in rotating categories each quarter (up to $1,500 in quarterly spending, then 1% cash back) | $0 |
2. Get Discounts With Credit Card Company’s Shopping Portals
Credit card companies offer exclusive discounts and deals through online shopping portals, providing a gateway to various products and services. These special offers allow cardholders to enjoy significant savings not accessible to the general public. By taking advantage of these discounts, shoppers can effectively stretch their budget and combat the impact of inflation on their expenses.
When considering credit cards with excellent online shopping discounts, assessing each card’s specific benefits is essential. Some cards collaborate with specific retailers, providing tailored discounts, while others have a broader selection of participating merchants.
Credit Cards With Shopping Portal
Credit Card | Sign-Up bonus | Annual Fee |
Chase Freedom Unlimited® | 1. 5% cash back on travel purchased through Chase Ultimate Rewards 2. 3% cash back on dining and drugstore purchases 3. 1.5% cash back on all other purchases | $0 |
Chase Freedom Flex℠ | 1. 5% cash back on activated bonus category purchases each quarter (on up to $1,500, then 1%)2. 5% cash back on travel purchases through Chase Ultimate Rewards3. 5% cash back on Lyft rides (through March 2025)4. 3% cash back on dining and drugstore purchases5. 1% cash back on all other purchases | $0 |
Chase Sapphire Preferred® Card | 1. 5X points on travel purchased through Chase Ultimate Rewards2. 5X points on Lyft rides (through March 2025)3. 3X points on dining, select streaming services, and online grocery purchases4. 2X points on other travel5. 1X points on all other purchases | $95 |
3. Avoid Interest With 0% Introductory Offers
One effective strategy for combating inflation using credit cards is to take advantage of 0% introductory offers on purchases. These offers provide a specific period during which you can make purchases without incurring interest charges. By utilizing these offers, you can spread out payments for large expenses, reducing the immediate impact of inflation on your finances.
This approach is beneficial for anticipated significant expenses subject to rising prices. By leveraging the 0% introductory offer, you secure the purchase at the current price without additional interest charges. Pay attention to the offer duration, plan to pay off the balance before it ends, and avoid excessive debt.
Using 0% introductory offers strategically, you can navigate inflationary pressures and save money on large purchases. Here are a few credit cards with attractive 0% introductory offers.
Credit Cards With 0% Introductory Rates
Featured Offers | APY | Min. Balance For APY | Est. Earnings |
SoFi | 4.30% | $0 | $1,075 |
BMO | 4.50% | $0 | $1,125 |
LendingClub | 4.25% | $0 | $1,063 |
Learn more about what happens after the 0 percent introductory period ends.
4. Save Money On Large Purchases With Sign-Up Bonuses
Leveraging sign-up bonus offers is another effective strategy for using credit cards to combat inflation. Credit card companies often provide these bonuses to new cardholders who meet specific spending requirements within a designated time frame. By strategically utilizing these sign-up bonuses, you can save money on large purchases and counteract the impact of inflation.
Sign-up bonuses typically come in the form of cash back rewards, travel points, or statement credits, and their value can range from hundreds to thousands of dollars. Meeting the spending requirements allows you to earn these bonuses, which can be used to offset future purchase costs or boost your budget with cash back rewards.
Credit Cards With Large Sign-On Bonuses
Credit Card | Sign-Up Bonus | Spending Requirement | Potential Value of Rewards |
The Platinum Card® from American Express | 80,000 points | $6,000 in the first six months | Up to $1,000 or more (value varies by usage) |
Citi Premier® Card | 60,000 points | $4,000 in the first three months | Up to $1,000 or more (value varies by usage) |
Marriott Bonvoy Boundless® Credit Card | 3 Free Night Awards (each valued up to 50,000 points) | $3,000 in the first three months | Up to $1,000 or more (value varies by usage) |
How To Choose The Best Inflation-Fighting Credit Card?
Choosing the best inflation-fighting credit card involves considering several factors that can help you mitigate the impact of inflation on your finances. A cash back credit card is one of the best cards that can be of great use when fighting inflation. These credit cards often don’t receive as much attention as travel rewards credit cards, which tend to steal the spotlight with their enticing perks. However, cash back cards come with a significant advantage that appeals to everyone: the opportunity to save money on your everyday purchases.
It’s important to note that not all cash back credit cards are the same. When you’re in the market for a new card, it’s crucial to consider the following factors.
- Evaluate the rewards program to ensure it aligns with your spending habits and offers high cash back rates or valuable rewards.
- Consider the annual fees associated with the credit card and assess whether the potential benefits outweigh the costs.
- Look for cards that provide additional perks like travel insurance, purchase protection, or extended warranties.
- If you plan to carry a balance, compare the interest rates of different cards to find the most favorable terms.
- Understand the credit score requirements for each card and apply for the ones that match your credit profile.
Bottom Line
While inflation may be on the rise, using a new credit card strategically can help you fight against its effects and even save money in the process. By leveraging cash back rewards, shopping portals, 0% introductory offers, and sign-up bonuses, you can mitigate the impact of inflation on your finances. However, remember to choose your credit card wisely by considering various factors to ensure it aligns with your financial goals and spending habits.
Frequently Asked Questions (FAQs)
Which is better: a generic travel rewards credit card or an airline credit card?
Generic travel rewards cards are great for collecting miles that you can use on flights, hotels, and rentals at the places you shop most frequently. Whereas, airline credit cards are best for people who frequently fly one airline as they typically come with benefits such as a free checked bag, access to priority check-in and security lines and the opportunity to get upgraded to business or first class. Learn more about generic travel rewards cards vs airline cards.
Will a new credit card decrease my credit score?
While applying for a new credit card or line of credit will drop your credit score by a few points due to the hard inquiry, getting a new credit card can actually increase your credit score. This is because it increases your total credit limit available, which can help improve your debt-to-equity ratio. Learn more about how new credit impacts your credit score.
What is the Chase 5/24 rule?
The Chase 5/24 rule states that in order to qualify for a new Chase credit card, you cannot have opened more than five new cards in the past 24 months. Get the full breakdown of the Chase 5/24 rule.
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