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3 credit card questions to ask yourself in 2020

Now is a good time to review your credit card strategy and evaluate what changes you can make to set yourself up for a financially rewarding 2020

Summary

The start of the year is a good time to review your credit card strategy and evaluate whether there are any changes you can make to set yourself up for a more financially rewarding 2020. You may be surprised to find that even small tweaks in your routine can lead to big results.

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Rather than wait until spring to tidy up your finances, now is a good time to sit back with a mug of tea or hot cocoa, take a break from winter weather and start putting together a financial plan for the new year – especially if your finances have been on autopilot for a while.

An easy place to start is to look at your current credit card strategy and evaluate whether there are any changes you can make this year to set yourself up for a more financially rewarding 2020. You may be surprised to find that even small tweaks in your routine can lead to big results.

Winter is also a good time to briefly look back and tie up loose ends from 2019 – such as old debt you still need to transfer, rewards that are expiring or annual fee cards you no longer use.

Here are three questions to ask yourself as you set up a plan for the new year:

See related: 3 realistic New Year’s financial resolutions

1. Do you know when your rewards expire?

Some programs will let you hold onto your rewards for as long as your account is open and in good standing. But many rewards card programs come with an expiration date: If you don’t use up the rewards you’ve earned by a certain time, you’ll forfeit them altogether. A rewards program may even cancel your earnings if you haven’t earned new points within a certain period.

Losing rewards to an arbitrary expiration date isn’t uncommon either. According to an October 2019 survey by Bankrate, for example, nearly half of adults who are members of an airline or hotel loyalty program – 46% – have forfeited rewards because they didn’t use them up in time.

If you have rewards that are expiring, now’s a good time to look up how to use them. With many cards, you’ll get more mileage out of your rewards if you trade them in for travel. But if you’re short on time and don’t have a trip coming up, cash or gift cards are also a good option.

Think twice, though, about using your points to buy merchandise: You’ll often get a poor return.

2. Are you paying interest on any of your cards?

According to the American Bankers Association, nearly half of bank cardholders – 43.2% – carry a balance on their credit cards, forcing them to pay interest on their purchases. Some cardholders carry a balance because they can’t afford to pay off a purchase in full. But others may carry over a balance simply because they aren’t paying close enough attention to their cards.

If you’ve got some holiday gift money left over, use it to pay off any balances that are accumulating interest. Or, if you’ve got good to excellent credit, transfer your balance to another card that doesn’t charge you interest for a specified period of time. Moving a balance to a card with an interest-free balance transfer offer will buy you time and save you a ton of money.

You shouldn’t have to pay a transfer fee to move it either. There are now plenty of balance transfer cards that allow you to transfer debt for no fee, including the Chase Slate card and the American Express Everyday card.

If you don’t qualify for a balance transfer, you can still save money by shopping around for a new card. Depending on your credit history, you may be able to qualify for a significantly lower rate from a smaller bank or credit union – especially if your credit has improved since the last time you applied for a new card. Alternatively, try calling your credit card company and negotiating a lower rate on your current card.

See related: 13 bad credit habits you need to break now

3. Are you taking advantage of competitive bonuses?

Credit card companies fiercely compete with one another by offering increasingly competitive sign-up bonuses. As a result, many consumers with good to excellent credit are benefitting from bonuses worth $200 to $500 or more just by signing up for a new card and using it regularly for several months.

If you haven’t applied for a new credit card for a while, now may be a great time to shop around for a card with a great sign-up bonus. Depending on the card, you could use your earnings to treat yourself to a luxurious spa day, pay for a big expense or even underwrite part of a summer or fall vacation.

For example, if you’re willing to pay an annual fee, you may be able to snag a travel card with a large enough sign-up bonus to purchase round-trip airfare or pay for several nights in a hotel.

See related: When is a credit card annual fee worth it?

Bottom line

Resolve to be more mindful with your credit cards this year, especially if you’ve mostly ignored them in the past. You can get a lot out of rewards credit cards these days – but only if you use them wisely.

Editor’s note: Information about Chase Slate and Amex EveryDay Credit Card has been collected independently by CreditCards.com. The issuer did not provide the details, nor is it responsible for their accuracy.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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Credit Card Rate Report Updated: September 23rd, 2020
Business
13.91%
Airline
15.48%
Cash Back
15.94%
Reward
15.78%
Student
16.12%

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