Whenever the New Year rolls around, many people are focused on making financial resolutions. Every year, people pledge to pay down , save more, and make more money. These goals are commendable, but often people abandon their intentions by February because they haven’t made much progress or haven’t come up with an actionable plan.
However, most people don’t think of credit cards as tools that can actually help them pay down debt and save money. As consumers, you have direct control over which has a different purpose, so if you use them strategically, they can be rewarding in more ways than one. Rather than make resolutions, challenge yourself to create a credit card strategy for the upcoming year. end up in your wallet. Every
Right after you’ve paid off your holiday bills, look at all the you have and see which ones you’re actually using and which ones can be cancelled or replaced. The obvious cards to get rid of first would be the ones you don’t use often. There’s not much in hanging onto those cards if they’re not doing anything for you.
In an ideal world, every you have is working for you in some capacity. Some people will get a just for a specific benefit such as travel insurance or mobile device insurance. But perhaps you signed up for a Costco , but you no longer shop there anymore. Or maybe you signed for a BMO Rewards , but now you prefer to use HSBC Rewards instead. People go through changes all the time, and switching or cancelling your is no different from switching your cell phone service provider.
It’s not just cardholders who may have gone through changes. providers occasionally update their products. Maybe there’s a out there with a higher earn rate than your current cashback . If what you’re getting is no longer benefiting you, or there’s a better offer available, why not make a change?
Chip away at your
Just as easily as can get you into , they can also help you get out of it.
Let’s assume for a second that you’ve overspent and you know it. The first thing you should do is lower your limit and take the out of your wallet. You’ll also want to remove it from your digital wallet. With this out of sight, you won’t be spending more and you can start focusing on your repayment.
The next step is to sign up for a balance transfer . When applying for one of these cards, you’re allowed to transfer an existing balance on your over to the new . This can work to your advantage since many balance transfer have favourable terms. For example, some offer 0% interest for up to 10 months on any balance transfer performed. Some balance transfer charge a fee for this option, but it’ll still likely be much lower than the regular interest rate on your old .
Many low-interest also come with a balance transfer option. When your balance transfer promotional period ends, your interest rate would go up. However, since you signed up for a low-interest , you’d be paying less interest compared to before. It’s a win-win situation.
Despite the benefits of balance transfer and low-interest , they’re still giving you access to . If you’re worried about overspending again, you could consider switching to a prepaid . By doing this, you can only spend what you’ve loaded onto the . In other words, it’s impossible to go into .
Fund your dream trip
Travel may not have been top of mind for many people during the pandemic, but it pays to start thinking about your vacation plans for the New Year. Many of the best in Canada have incredible sign-up offers and benefits that can make your next trip amazing.
For example, there are multiple Aeroplan available. Consider getting one of these cards if you plan on flying soon since the is usually quite generous and you may get free airline benefits such as free checked bags.
To really make your dream trip happen, you might also consider signing up for multiple Aeroplan . If you’re able to meet the requirements for each , you could quickly rack up the points—points that could then be used on a business class flight for your luxe getaway.
There are out there that earn you , either through specific airlines or with a general . TD Rewards is a good example—the points you earn can later be redeemed for travel via Expedia for TD. Since Expedia has everything from cruises to rental cars, you can use your points for just about any travel expense.
Maximize your spending
One big mistake that people make is to just use whatever they have to make purchases. While it’s true that you’ll be earning some rewards, you can really maximize your return by matching your spending habits with the ‘s structure.
Many of the best in Canada have increased earn rates for specific categories. For example, there are dining that give you more points or on restaurants, food delivery, and even groceries. If eating out and groceries are your largest monthly expense, then it just makes sense to get a that gives you additional rewards whenever you spend on those categories.
Keep in mind that it’s unlikely that you’ll find a single that perfectly matches your spending habits. To earn , you may need to get multiple cards. Of course, that only makes sense if the rewards you’re getting are worth more than any annual fees that you’re paying.
That’s where no annual fee come in. The rewards you get may not be the greatest, but there might be a that gives you an increased earn rate in categories that you’re interested in.
If you’re intimidated by the idea of managing , you can always make life easier for yourself by labelling your to remind yourself of which ones to use at specific merchants.
Chase the best offers
The pandemic has created a bit of chaos for providers since many people weren’t spending as much as they used to. This is actually a good thing for consumers as some of the incentives to sign up for a new have never been better.
If you research the offers in Canada, you’ll likely come across multiple welcome bonuses that are worth hundreds of dollars in . Don’t worry if you’re not interested in travel, have also gotten in on the action with sign up offers worth up to 15% in
The catch is, these within the first three months of signing up. are typically tied to a requirement that has a time limit. For example, you might need to charge at least $3,000 to your
Reaching that requirement might seem difficult. However, it helps to be aware of any major upcoming expenses, like payments for your home and auto insurance, or renovations you may be planning this year. Timing a new sign-up with a big life expense can help you take advantage of any generous sign up offers available.
It’s also worth mentioning that these bonuses are always changing. Sometimes the offers are higher than what’s usually available. If you see a bonus that seems higher than usual, it could be beneficial to sign up right away.
Make more money
Making more money is a common financial resolution for many people. But unless you’re planning on getting promoted or picking up a side hustle, you’re not going to be making any extra .
Instead of waiting for money to fall from the sky, why don’t you give yourself a raise? By getting one of the best in Canada, you’ll guarantee that you’re getting paid every time you make a rewards, you don’t need to worry about destinations and taxes as you do with cards. back puts money back in your pocket.. With
While cards are great, there are still some things to be aware of. Some rewards cards offer a better sign up offer than others, so always check for the latest promotion. When you get your can also vary between cards. Many only pay out once a year, while a few give you your every month. It’s also worth noting that some cards only give you your back when you meet a minimum spending threshold.
Final word: Pay back your credit card bill in full
Having the perfect is great in theory, but it can go downhill fast if you take on more than you can handle. It doesn’t matter what your goals are or what benefits you’re getting, if you’re not paying off your entire bill, any you might be offered won’t be worth it since you’ll be paying . Sometimes, the best could be avoiding altogether.