4 credit card moves to make before the year ends

As 2020 draws near, it’s a great time to knock out your card debt or put your rewards stash to use


The year is more than two-thirds complete, and there are several credit card moves you should make before we ring in 2020. The most critical is to pay off any card debt you may have. But if you pay off your balances every month, it may be time for a new rewards card.

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The year is more than two-thirds complete, and there are several credit card moves you should make before we ring in 2020:

Pay down your credit card debt

This is always a smart thing to do. There’s some added urgency now because rates are very high. The current average for people with good credit is 17.61 percent, just shy of the record 17.80 percent we observed in July. Those with lesser credit are charged an average of 24.98 percent, and the median is 21.30 percent.

The Federal Reserve reports the average household with credit card debt owes $5,700. At 17.68 percent, if you only make minimum payments toward this debt, you’ll be in debt for 235 months (nearly 20 years!) and you’ll pay $7,446 in interest. A much better option would be to sign up for a balance transfer card.

The longest 0 percent balance transfer period is 21 months, offered by the Citi Simplicity® Card (after 21 months, the regular variable APR ranges from 14.74 to 24.74 percent). If you get this card and make 21 equal payments of $271 and change, you would pay off that average $5,700 debt with no interest in less than two years.

Like most balance transfer cards, this one charges a transfer fee ($5 or 5 percent, whichever is greater), so that would add $285. All things considered, that’s a small price to pay.

If you want to avoid the transfer fee, these two cards have 15-month 0 percent balance transfer periods and no transfer fees as long as you complete the transfer within 60 days of opening the account: Chase Slate (regular variable APR once the intro period ends: 16.49 percent-25.24 percent) and Amex EveryDay® Credit Card from American Express (regular variable APR of 13.99 percent-24.99 percent following the intro period).

See related:  How to manage credit card debt ahead of the next recession

Get a new rewards card

If you can pay your credit card bills in full, then you’re an excellent candidate for a rewards card. A great reason to get a new one right now is because there’s still time to put that bonus to use around the holidays.

If you want to defray holiday travel costs, my top pick is the Capital One® Venture® Rewards Credit Card. You’ll get 50,000 miles (worth at least $500 in travel) after spending $3,000 in the first three months. Cardholders earn 2 miles for every dollar they spend.

What really sets this card apart is its flexibility. You can use Capital One’s Purchase Eraser feature to cancel out a wide variety of travel purchases at a rate of 1 cent per mile. That’s a big advantage because you don’t need to wrestle with airline award availability.

It’s already pretty late in the game to book holiday award travel, particularly if you’re looking to sign up for a new card and need time to earn the bonus and receive points or miles before booking your flight or hotel room. With the Venture card, you can make your reservations now and credit your account once you’ve earned the bonus.

Venture miles can be transferred to several airline partners, though I generally find the Purchase Eraser feature is easier and more lucrative. Other transferable points cards worth considering for their introductory bonuses and other benefits are the Chase Sapphire Reserve and the Citi Premier℠ Card. While their bonuses are more generous, these cards aren’t as flexible with their holiday travel deadlines.

If you want to dedicate a credit card bonus toward something other than travel, you can get 20,000 points – worth $200 – from the Wells Fargo Propel American Express® card after spending $1,000 in the first three months. There’s no annual fee on that cash back card.

Take stock of your rewards stash

You might be sitting on a lot of value via your existing cards. Maybe you already have enough points or miles for a free flight or hotel stay. Or maybe your cash back could go a long way toward offsetting your holiday gift or entertaining costs. Your rewards probably won’t get more valuable over time, so use them now if you can.

See related:  5 reasons to use your rewards points for travel now

Make a final push for elite status

If you have an airline or hotel card, review your elite status situation now because there’s still time to change course if needed. If you’re close to qualifying for the next threshold, you might need to add a trip or switch your spending from another card.

With summer in the rearview mirror and the holiday season not too far ahead, September is an ideal time to sort out where you’ve been and where you want to go with your credit card strategy.

The information about the Chase Slate, Amex EveryDay Credit Card, and Citi Premier has been collected independently by CreditCards.com. The details have not been provided or reviewed by the card issuers.

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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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