How are you coming along with your financial goals this year?
Did you start an emergency fund or cut back on spending? Have you been budgeting for a well-deserved vacation or trying to get rid of existing credit card debt? Whichever goal you have in your sights, the right credit card could help you achieve it -- so long as you use it wisely.
The following tips and tricks can help you set smart financial goals this year while avoiding some of the common pitfalls and financial traps of credit cards.
How to use credit cards to achieve your financial goals for 2024
Your first course of action is figuring out what you want to accomplish with a credit card this year. Being intentional about your goals can help pave the way toward a card that can help you accomplish them.
For example, you may want to choose a balance transfer credit card if you currently have high-interest debt you need to consolidate and pay down. If you want to earn more rewards on groceries this year, choose a rewards card that features bonus categories aligned with that goal.
Maybe you want to start traveling in 2024 and you’re hoping a stash of points and miles can make your plan happen. Below you’ll find a number of goals with tips on how to accomplish them.
Goal: Pay off credit card debt
If you’re paying credit card interest on your debts right now, your priority should be paying it off. Fortunately, a range of balance transfer credit cards can help by offering an introductory 0% APR on balances you transfer for up to 21 months.
You’ll need to pay a balance transfer fee to take advantage, but this fee can be well worth it for the financial savings you get in return.
While there are a ton of excellent balance transfer offers on the market today, one of the best is the Citi Simplicity® Card*. It comes with an intro 0% APR on balance transfers for 21 months from the date of first transfer (then 19.24% to 29.99% variable). Balance transfers must be completed within four months of account opening. There’s no annual fee, and as long as you make any transfers within four months, the intro balance transfer fee is 3% ($5 minimum). For transfers after four months, the fee increases to 5% ($5 minimum).
Imagine you have $1,000 in credit card debt with a 21% APR, and you’re currently paying $30 per month toward this debt. At that rate, you would be paying off this balance for 51 months and fork over $513 in interest charges alone before becoming debt-free.
If you applied for the Citi Simplicity, you could pay a $30 balance transfer fee and transfer your $1,000 in debt over.
You would start the process owing $1,030 due to the balance transfer fee, but you would owe 0% interest for a full 21 months (then 19.24% to 29.99% variable). To determine how much you’d have to pay each month, divide the balance by the number of months in the introductory period. In this case, it would be 1,030 / 21. You’d have to pay at least $49 each month to get it to zero by the time the promotional period ends.
Goal: Cut back on your grocery bill
Perhaps your biggest 2024 goal is saving money on food or at least making the most of your growing grocery bill. You may be able to slash your grocery budget by using a meal plan, shopping supermarket sales or both. You can also save by boosting your rewards with one of the best credit cards for groceries.
For example, the Blue Cash Preferred® Card from American Express earns 6% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%), 6% cash back on select U.S. streaming subscriptions, 3% cash back at U.S. gas stations, 3% cash back on transit and 1% cash back on other purchases. New cardholders can also earn a $250 statement credit after spending $3,000 on purchases within six months of account opening.
Since rewards earned with this card are redeemable for statement credits, they can actually reduce the amount of your grocery bill based on how much in rewards you earn.
It does have a $95 annual fee ($0 intro fee for the first year), but its high rewards at the supermarket and at the gas pump could eclipse the cost of the card.
Terms apply to American Express benefits and offers. Enrollment may be required for select American Express benefits and offers. Visit americanexpress.com to learn more.
You want to have your finger on your credit pulse
If you want to focus on building credit in 2024, there are many ways to do so with and without a credit card. For example, you can:
- Use free credit tools to track your progress. Many credit card companies offer free tools to help you track and monitor your credit over time whether you’re a customer or not. Chase Credit Journey and Capital One CreditWise, for example.
- Apply for a credit building card. A credit-building card like a secured credit card could help improve your credit profile. By paying bills on time and keeping your balance low, you can help increase your credit score.
- Use credit-boosting apps. For example, Experian Boost. Experian is one of the three major credit bureaus in charge of creating your credit report. They also offer a free program called Experian Boost, which takes additional factors like bill payments into account to increase your Experian credit score.
Goal: Trim subscription services
You’ve probably heard that Netflix is clamping down on password sharing, and other subscription services are starting to follow suit with their own measures. Either way, you can save money by cutting the subscriptions you pay for altogether, or by picking a credit card that earns more rewards on subscription services.
The Blue Cash Preferred® Card from American Express, which we mentioned above, is one of the best by far.
Also look into the Chase Sapphire Preferred® Card, which earns 5X points on travel booked through Chase Travel℠, 3X points on dining, 3X points on online grocery purchases, 3X points on select streaming services, 2X points on other travel and 1X points on other purchases.
Goal: Grow your savings
Maybe you want to grow your savings in 2024, especially since interest rates for various savings products are higher than they were a few years ago. For example, the best high-yield savings accounts are offering rates close to or above 5% APY at the moment. The best CD rates are also in the same range.
There are also some credit cards that let you earn rewards and invest them right away. One example is the Fidelity® Rewards Visa Signature® Credit Card*, which earns 2% cash back and lets you move your rewards into an eligible Fidelity account. This card doesn’t charge an annual fee or foreign transaction fees, either.
Goal: Plan a trip
If you’re ready to travel this year, credit card rewards could help. Travel credit cards let you earn flexible rewards that you can use to cover travel expenses.
The key to benefiting from travel rewards is the same as if you were earning cash back. You have to pay your credit card balance in full each month to avoid credit card interest. Interest charges could quickly wipe out any value you’d get from your rewards. It’s also important to use your points in the most valuable way, which in most cases, means taking advantage of point transfers to the card issuer’s travel partners.
Travel credit cards also offer a myriad of useful benefits. The higher-end travel cards (which typically charge an annual fee) might even feature annual travel credits you could put toward your vacations. If you’re opting for a card with an expensive annual fee, first check to see if the value of the card’s perks and rewards are worth the cost.
The best travel card for you depends on your goals and the type of rewards program you’re looking for.
For example, points you earn with the Chase Sapphire Preferred can be redeemed for cash back, gift cards and merchandise, or you can get a 25% redemption bonus for redeeming for travel booked through the Chase Travel portal. You can also transfer Chase points to hotel and airline partners like British Airways, Southwest Rapid Rewards, United MileagePlus, IHG One Rewards and World of Hyatt, where they might be worth even more.
Tips for getting the most from your credit card
No matter your credit card goals in 2024, these tips can help you get the most from the experience:
- Avoid accruing credit card interest. With so many introductory 0% APR offers available today, you don’t have to pay the exorbitant interest rates many credit cards charge. Instead, opt for a card that lets you avoid interest for a limited time, then strive to get your card to a $0 balance before the introductory period ends.
- Keep balances low (or at $0): Since your credit utilization ratio is the second most important factor that impacts your FICO credit score, you’ll want to keep the amount of debt you owe as low as you can. Most experts recommend keeping this ratio below 30% of your available credit for the best results, however, 10% would be even better. Paying off your balance will also help you avoid credit card interest when you don’t have an introductory 0% APR offer.
- Never miss a payment. Even more important than maintaining a healthy credit utilization is your payment history. If you want to keep your credit score in tip-top shape, you’ll need to pay your credit card bill and other payments early or on time every month. Most credit cards let you set up alerts or autopay to help ensure you never miss a payment.
- Track spending throughout the month. Track your credit card spending throughout the month so you have an idea of how much you’ll owe when your statement credit closes. Tracking your spending can also help ensure you don’t get into the habit of accidentally overspending with your card or buying things you don’t really need.
- Use a monthly budget. Using a credit card with a monthly budget or spending plan can also help you stay on track with your goals, especially when you use credit only for planned purchases you have budgeted and saved for.
The bottom line
The right credit card for you in 2024 depends on what your goals are and what you hope to get in return. Fortunately, there are credit cards to fit nearly any type of goal, whether that’s cutting down high-interest balances, earning more cash back for regular expenses or finally earning points or miles so you can plan a once-in-a-lifetime trip.
No matter what, you’ll also need to make sure credit card interest doesn’t derail your goals. Have a plan to avoid credit card interest and long-term debt as you use credit cards throughout the year, and you’ll be a lot better off.
*All information about the Citi Simplicity Card has been collected independently by CNET and has not been reviewed by the issuer.
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