Top 6 Credit Card Tips For 2023 – Forbes Advisor

So far the roaring 20s have turned out to be a bit more clamorous than we had hoped. Between the Fed’s rate hikes, crypto craziness and everything else that’s roiled financial markets, it’s been a challenge to keep your finances on track. Here’s to hoping for a calm 2023.

Whatever you’re wishing for in the new year, making smart financial decisions should be at the top of your list. Forbes Advisor has some valuable tips when it comes to your credit cards to help you make the most of your money in 2023.

1. Take Advantage of Free Money

Many cards, including credits that reset every calendar year. Failing to use up your credits each year can leave thousands of dollars on the table over the long run. While it’s too late to use credits for 2022 if you are reading this in January, you can start using the credits for 2023 right away so you won’t be scrambling at the end of the year.

While we’re on the subject of free money, make sure you are optimizing your offers. Most major issuers, like Chase and Amex, have targeted offers that reward you for purchases you already make. The key is that you have to register for them. Make a monthly reminder in your calendar now to review your cards and enroll in any offers that you might be able to use. Enrollment is as simple as just clicking to activate and can save you a bundle on a purchase you were already planning to make.

2. Ask for (and Ye Shall Hopefully Receive) a Retention Offer

Since your calendar is already open with a reminder to check your cards for offers, make a note now of your card renewal dates and set a reminder to call 30 days in advance to ask for a retention bonus. A five-minute phone call could net you hundreds of dollars worth of rewards as banks pull out the stops to keep your business. And this way if you don’t get what you want, you can evaluate whether you want to pay the annual fee to keep the card before you get hit with the charge.

3. Make Sure Your Credit Cards Still Fit

Overindulgence at the holidays can leave more than just your waistband strained. Now is a great time to evaluate your current credit cards and see if what you have matched up with your spending patterns over the past year. With the pandemic on the wane, you may find that your 2023 plans include more travel and less staying home.

If that’s the case, you’re likely to spend more on things like airfare, hotels and dining out. Even if travel isn’t in your short-term plans, a card that offers high rewards on groceries and gas may make sense given the current rate of inflation. Take a look at what you’re paying in annual fees and see if you’re truly getting that amount or greater back in value. If not, it’s time to consider making a change to a new card that’s a better fit for how you spend.

4. Ditch Debt

If you’re carrying debt, especially on a high-interest credit card, the New Year can offer a fresh start. Since the Fed’s latest rate hike, credit card issuers have been following up with APR increases of their own, making every dollar you owe on a card more expensive.

A balance transfer card can be a powerful tool to help you pay down what you owe without increasing additional finance charges. If possible, the ideal goal with a balance transfer card is to pay off the entire balance within the promotional 0% APR period. You can figure out how much your monthly payments would have to be to achieve that goal by dividing what you owe, plus any balance transfer fees, by the number of interest-free months on the card.

For example, if you owe $10,000 and you plan to transfer it to a card with a 15-month 0% APR balance transfer offer that carries a 3% balance transfer fee, your new balance will be $10,300. To pay off the debt completely during the introductory APR period, you’d have to pay $686.67 each month for 15 months. Use Forbes Advisor’s balance transfer calculator to see how a balance transfer card can help you reach your debt-free goals.

5. Commit to a Cash-Back Portal

The only thing better than getting cash back on your credit card spending is getting even more cash back. You can easily do this via shopping online through a cash back portal with your rewards card. Websites like Rakuten.com or BeFrugal.com will give you cash back just for shopping the way you normally would. By stacking this payout with what you’d get from your credit card, you can amp up the savings on most of your online spending.

6. Start a Bucket-List Item Fund

If 2022 was the year of “revenge travel”, 2023 will hopefully bring a greater ability to reach other goals. The new year might be a great time to dream big and start saving for a bucket-list item, like a home renovation project, new car or other big-ticket item. One way to fast-track yourself to the purchase of your dreams is by using cash-back rewards cards. See our list of the best cash-back rewards cards to help you get started.

Bottom Line

The start of a new year can be a jumping-off point to rev up your financial fitness, and that includes taking note of where you are with your credit cards. Setting realistic goals to pay off debt, trading in cards that don’t fit your lifestyle for ones that do or just adjusting how you earn and spend your rewards are all smart money moves. Make sure to include some in your New Year’s Resolutions.

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