Getting Right

How to handle credit cards during inflation

Inflation has driven more consumers to use credit cards. As US News reports, American consumers opened 28 more credit cards in the first quarter of this year compared to last year. Credit card balances also increased by 13 percent from the second quarter of last year to this year. If you’ve been using your credit card more lately, here are some ways to use it to fight inflation.

Review and Reduce

It’s important to try to curb credit card spending when everything is more expensive than you’re used to. Review your budget and see where you can cut back on expenses. One of the easiest places is subscription services — there’s a good chance you’re spending money on at least one service you don’t even use. Take the extra money from your budget trim and apply it to your credit card balance.

Use Cash Back

One of the best perks of credit cards is the cash back reward. Make sure you’re spending in categories that give you the best bang for your buck, then use your cash back to pay down your balance. While some credit cards make you do this process manually, some let you automate it so the cash back is directly applied each month. Just remember: Don’t spend money on categories just to earn the rewards. Reward points will never outpace credit card interest rates. If you’re using a card that doesn’t match your spending habits, consider making a change.

Shop Around

Speaking of change, you might want to take advantage of a low interest intro rate on a new card. These cards can be helpful for transferring balances from high interest cards. They can also be helpful if you need to make a large purchase. Just make sure you can pay off the balance before the 0% interest intro offer expires.

Chris O'Shea

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