Whether you’re planning on hitting the road for spring or summer break or launching yourself into home improvement projects, Discover’s bonus categories for the second quarter of 2024 can offer some value for your spending.
From April 1 through June 30, 2024, holders of eligible cards like the Discover it® Cash Back and Discover it® Student Cash Back can earn 5% cash back at gas stations, electric vehicle charging stations, home improvement stores and on public transit, on up to $1,500 in combined spending for the quarter. All other purchases earn 1% cash back. Activation is required to be eligible for the higher rewards rate.
Here’s what you need to know about which purchases qualify.
Discover bonus rewards categories for 2024
Q1 (Jan. 1–March 31)
Restaurants.
Drugstores.
Q2 (April 1–June 30)
Gas stations/EV charging stations.
Home improvement stores.
Public transit.
Q3 (July 1–Sept. 30)
TBD (In 2023: Gas stations; digital wallets).
Q4 (Oct. 1–Dec. 31)
TBD (In 2023: Amazon, Target).
Discover’s Q2 bonus categories unpacked
Discover’s 5% categories come with terms. For the second quarter of 2024, here’s what will qualify:
Gas stations and EV charging stations
To earn the bonus rate, a purchase must be classified as made with a place that sells automotive gasoline or offers an electric vehicle charging station to the public. When you’re on the go, those purchases made at the pump or inside the gas station may also qualify for the elevated rewards rate.
Some purchases may not qualify, such as those made at supermarkets, supercenters, wholesale clubs and parking garages.
Public transit
Eligible public transit purchases that earn 5% back will include passenger buses, railways, ferries, taxis and rideshare services made in the U.S. Long-range passenger land, rail and water transportation services won’t qualify.
Home improvement stores
If you’re planning some home renovation projects or need to stock up on supplies, you can earn more value by doing it within Discover’s promotional window.
Eligible purchases will include those made online and in store at home improvement stores; building supply stores like lumber, paint and hardware stores; and lawn, nursery and garden supply stores. Purchases made through third parties like contractors may not qualify to earn 5% back. And purchases made at stores that offer home furnishings, home appliances, plumbing, heating supply and floor coverings won’t qualify.
Maximizing Discover’s Q2 bonus categories for 2024
To make the most of your bonus categories for the quarter, don’t forget these steps:
Log in to your Discover account to activate the bonus categories.
Use your Discover card for any purchases you make in those categories.
Track spending to know when or whether you’ve reached the $1,500 spending limit. (You can view an automated tracker while signed in to your Discover account.)
Considering the Discover it® Cash Back?
The Discover it® Cash Back card can be a worthy contender for your wallet if you’re organized enough to keep track of bonus categories that change every quarter and require activation. It’ll also work best if you’re not in the habit of maintaining a monthly balance, as the card’s steep interest charges will chip away at the value of rewards.
The card’s features include:
Annual fee:$0.
APR:0% intro APR for 15 months on purchases and balance transfers, and then the ongoing APR of 17.24%-28.24% Variable APR.
Sign-up bonus: INTRO OFFER: Unlimited Cashback Match for all new cardmembers – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. You could turn $150 cash back into $300.
Discover card travel insurance used to be a common benefit of many of the bank’s cash-back cards. But in early 2018, Discover cut the travel insurance benefits on all of its cards (alongside benefits like extended warranty and price protection).
That means that today, Discover cards don’t offer any type of travel insurance. Instead, the bank now focuses on the simplicity of cash-back awards on its rewards credit cards.
Which other cards offer travel insurance?
Since Discover card trip insurance is a thing of the past, you might consider spending on other cards that offer travel insurance protections.
Chase cards with travel insurance
The Chase Sapphire Preferred® Card and Chase Sapphire Reserve® offer some of the most robust travel insurance coverages available on a credit card, including trip delay protection, primary auto rental collision damage waiver insurance, baggage delay insurance, lost luggage protection and travel accident insurance.
Chase Sapphire travel benefits
Chase Sapphire Preferred® Card
on Chase’s website
Chase Sapphire Reserve®
on Chase’s website
Travel insurance coverage
Trip cancellation.
Trip interruption.
Trip delay.
Baggage delay.
Lost luggage.
Auto rental collision damage waiver.
Travel accident.
Trip cancellation.
Trip interruption.
Trip delay.
Baggage delay.
Lost luggage.
Auto rental collision damage waiver.
Roadside assistance.
Travel and emergency assistance.
Travel accident.
Emergency evacuations and transportation.
Emergency medical and dental.
Learn more
Here is a full list of credit cards that offer Chase travel insurance:
Chase cards with travel insurance
Premium cards with travel insurance
Capital One Venture X Rewards Credit Card
NerdWallet Rating
Annual fee
$395
The Capital One Venture X Rewards Credit Card includes primary auto rental collision damage waiver, trip cancellation/interruption insurance, trip delay reimbursement insurance, a $1 million worldwide common carrier travel insurance policy and lost luggage protection.
No-annual-fee cards with travel insurance
While you’ll get the most travel insurance coverage from a premium travel card, some cards with no annual fee offer travel insurance as well.
What types of travel insurance coverages do credit cards usually offer?
Here are some of the most common types of travel insurance offered on credit cards.
Auto rental collision damage waiver insurance covers damage to or theft of cars that you rent using your credit card. For auto rental collision damage waiver insurance to apply, you must make your reservation and pay for your car rental with a card that has this benefit. You must also decline the car rental company’s collision damage waiver. Most auto rental collision damage waiver insurance is secondary, meaning that you must make a claim through your personal auto insurance before the credit card insurance will pay. Primary auto rental collision damage waiver insurance is a benefit on some premium credit cards.
Baggage delay insurance can reimburse you for expenses you incur as a result of a temporary baggage delay. Incidentals like toiletries, clothing, chargers and medication are typically reimbursable through baggage delay insurance.
Lost luggage reimbursement covers the cost to repair or replace your checked and carry-on baggage and its contents. Lost luggage coverage is usually provided as secondary insurance and will cover the difference between what an airline or other carrier reimburses you and the amount of your loss, up to the limit of coverage.
Travel accident insurance can compensate you or your survivors for loss of life, limb or function when you book your common carrier ticket, such as an airline ticket, with your card. Travel accident insurance typically specifies a payout amount for each type of covered loss.
Trip cancellation and interruption insurance may reimburse you for certain prepaid travel expenses when a trip is interrupted or canceled for a covered reason. Trip cancellation and interruption insurance policies vary widely but usually cover at least airfare booked with your card. Some policies may cover a wide range of prepaid travel expenses.
Trip delay reimbursement can cover meals and overnight accommodations when you are significantly delayed and you book your travel with your card. Trip delay benefits usually kick in after a certain number of hours of delays or when you are delayed overnight.
You can also buy travel insurance separately
If you aren’t interested in adding a new credit card to your wallet but want travel protections, you have options.
Consider shopping for one-off plans from third-party travel insurance companies to find coverage that fits your risk tolerance and budget. A bonus of purchasing travel insurance out-of-pocket — rather than using a card’s built-in benefits — is that you can customize the plan to meet your needs.
You can even add on Cancel For Any Reason coverage to more confidently protect your upfront and nonrefundable payments.
Expect to pay roughly 7% of your trip budget for travel insurance.
Should I use a Discover card for travel?
With no Discover travel protection, does it make sense to use a Discover card to book travel? The short answer is probably not.
Discover does not offer any credit cards featuring additional rewards on travel purchases. Discover does market the Discover it® Miles travel credit card, but the card earns 1.5 miles per dollar on every purchase and has no rewards or benefits specific to travel.
The information related to the Chase Freedom® Student credit card, Chase Slate Edge℠, Ink Business Plus® Credit Card, Starbucks® Rewards Visa® Card and the United Club℠ Business Card credit cards has been collected by NerdWallet and has not been reviewed or provided by the issuers of these cards.
How to maximize your rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2024, including those best for:
Inside: Are you looking to maximize your rewards and credit card hacks? This guide will teach you the most effective methods for using your hacking, signing up for bonus rewards, and making efficient card purchases.
Credit card use extends beyond just making purchases. Savvy credit card users understand that with the right set of hacks and optimal usage, there’s a world of rewards that are ripe for the picking.
Money saved can be money earned, and this simple philosophy forms the cornerstone of these 25 credit card hacks you’ll be learning about today.
Why do credit card hacks matter? Well, I just received a $700 check for credit card rewards. That is enough to pay for a weekend trip away.
What are Credit Card Hacks?
Credit card hacks are creative strategies employed by credit card users to maximize the benefits and rewards offered by their credit cards while also potentially saving more money.
This trend has become more popular in recent years due to the rise in premium travel and cashback cards that offer lucrative ongoing rewards programs. Users who learn about these hacks can save you money on travel or just put cold hard cash back in your wallet.
With strategic approaches, these hacks provide an avenue to optimize rewards and navigate the financial landscape more effectively.
Proven Credit Card Hacks to Maximize Rewards
Tip #1 – Utilize sign-up bonuses
One of the most attractive features of credit cards is the sign-up bonuses they offer, which are essentially rewards that cardholders can earn after meeting a certain spending threshold within a specified timeframe. The bonuses can range from hundreds to even thousands of points, miles, or cash – favorably impacting your rewards balance.
To illustrate, if you take the Chase Sapphire Preferred® credit card, both partners in a household can get up to 50,000 extra points each as part of the sign-up bonus.
Bonus tip: Stagger your applications, so once one person gets the bonus after meeting the spending requirement, the other person can then apply and achieve the next round of bonuses.
Tip #2 – Increase credit limit
The principle behind this is simply buffering your “credit utilization ratio”, which is how much of your total available credit you are utilizing.
To illustrate how a credit limit increase will work, let’s consider an example: with a credit limit of $10,000 and a credit usage of $3,000, your utilization ratio stands at 30%. But once your credit limit increases to $15,000 with the same credit usage, your utilization ratio drops to 20% – which is a noticeable improvement.
Remember, when requesting a credit limit increase, some card issuers might execute a hard inquiry on your credit report, which could temporarily decrease your score. Hence, you should try to find out beforehand whether your issuer is likely to perform a hard or soft credit pull. Soft inquiries won’t affect your credit score, making them the preferable approach.
Tip #3 – Master balance transfers
A balance transfer, executed proficiently, can be an effective way to handle significant credit card debt. By focusing on reducing the cost of debt through lower interest rates, balance transfer can accelerate your debt repayment process while saving you considerable money over time.
This is what one of my clients did and the date when the 0% interest ended was very motivating to pay off their debt.
This process entails the shuffling of debt from one card (usually one with a high interest rate) to another card—preferably with a 0% promotional APR offer. With this interest-free period, you can focus on repaying the principal balance, hence clearing your debt faster.
As a finance expert, make sure balance transfers are only beneficial if you’re mindful of the terms, like how long your 0% rate will last and what fees are involved in the transfer to the new card.
Tip #4 – Purchase prepaid cards with credit
Need a way to spend a certain dollar amount by a certain deadline? Then, look at purchasing prepaid cards with a credit card as a strategy to earn extra rewards points. This method entails buying prepaid cards or gift cards using your credit card, and later using these prepaid cards to cover those expenses you typically will use.
In other cases, customers have reported that their credit card companies have clawed back rewards points that were initially given for gift card purchases. Double check their terms and conditions, many issuers, including American Express, explicitly exclude such transactions from earning rewards. 1
Tip #5 – Harnessing the 15/3 Methodology
The 15/3 Methodology is a credit card hack that intends to optimize your credit utilization ratio—one of the significant factors that impact your credit score.
Here’s how it works: You pay off a majority of your card’s balance 15 days before your statement date, and then pay off the remaining balance three days before the statement date. By doing this, you create the illusion of a lower balance, which can positively impact your credit score.
There is still a debate about whether or not this strategy improves your credit card score. Paying your bill on time will definitely improve your score.
Tip #6 – Strategies to earn additional rewards through third-party programs
An often overlooked but highly effective credit card hack is utilizing third-party apps and websites that offer additional rewards when you shop at participating retailers and restaurants. These rewards are additional to the cash back, miles, or points awarded by your credit card.
One such app is Dosh, a cashback app. By linking your credit card to your Dosh account, you can earn up to 10% cash back from participating retailers on top of the rewards earned from your credit card. Similarly, apps like Drop and Bumped give users points for every dollar spent, and these points can be redeemed for gift cards.
Furthermore, many airlines and hotels participate in dining rewards programs where you’ll earn extra rewards at select restaurants. Airlines like United, Southwest, Delta, and hospitality giant companies like Marriott and Hilton actively participate in such programs.
Tip #7 – Earn a credit card sign-up bonus then canceling the card right away
Also known as credit card flipping or churning, the tactic of earning a credit card sign-up bonus and then canceling the card right away has been employed by some savvy credit card users to maximize rewards.
However, this practice isn’t as easy or beneficial as it appears. While it sounds like an accessible system to generate easy money, it comes with several potential pitfalls that could make it a risky move.
Firstly, numerous card issuers have, over the years, implemented stricter rules to deter this practice. Chase, for instance, has the 5/24 rule indicating you can have only five new credit cards within the last 24 months. 2
Repeatedly opening and closing the same card can result in a declined application or rescinded bonus and hurt your credit score-perceived as credit misbehavior by the issuer.
It can also be viewed as unethical and potentially lead to you being barred from opening accounts with that issuer in the future.
Churning can negatively affect your ability to get approved for future credit cards and loans because lenders may think you’re a risky borrower.”
Tip #8 – Develop a multi-card system
This method aims to cover all your spending by using different cards that offer elevated rewards for certain purchase categories.
For instance, we have one card that pays an unlimited flat rate of 2% on all purchases. Then, another rewards card offering increased category rewards, with travel and gas. Then a there card that rotates through various categories each quarter.
Diversifying your spending amongst several credit cards can help you to earn the maximum possible rewards. However, endowing yourself with several credit cards is not for everyone as it requires careful financial management. In some cases, the potential of overspending can outweigh the benefits.
Tip #9 – Transfer points between multiple cards
Transferring points between cards (provided they are from the same issuer) is another useful strategy whereby you can redeem them at their maximum possible value.
The goal is to make your spending work for you and maximize the rewards you can earn from daily expenses. However, people should employ this strategy responsibly and ensure they’re not overspending just to earn rewards.
In such a strategy, points on traditional cashback cards can be transferred to airline and hotel partners when you also have a transferable points card like the Sapphire Reserve or Sapphire Preferred. So, not only are you earning cashback on your purchases, but you’re also accumulating lucrative points that can be redeemed for travel.
Tip #10 – Don’t use cash
In the world of credit card rewards, cash is no longer king. Whenever feasible, you should consider using your credit cards instead of cash or debit to pay for everyday purchases. This allows you to earn rewards on purchases you’re making anyway.
The best way to implement this is for you to bills with their credit cards instead of cash or debit and set this up on autopay. This serves a dual purpose of potentially earning rewards on these payments whilst also conveying a positive message to the banks about your money management skills, leading to possible credit score improvements.
However, this method works best when your spending doesn’t increase as a result. Only use your credit card for expenses that you’d normally pay in cash and for which you already have the money set aside to pay.
Tip #11: Time your purchasing
Being strategic about when you make your credit card purchases can help you wring out some extra benefits.
One way to optimize your earning potential and maintain a healthy credit score is to plan your large purchases around your credit card’s billing cycle. Making your most significant purchases immediately after your statement date ensures that you have the longest possible repayment period, effectively offering you a short-term, interest-free loan.
Furthermore, if your issuer has a rewards cut-off at the end of a calendar year, you can make larger purchases ahead of time to push yourself into a higher rewards bracket.
Tip #12 – Make Micropayments
Rather than making one full payment, consider making multiple payments over the billing cycle, commonly referred to as ‘micropayments.’ This helps keep your running balance low and, in turn, your credit utilization ratio – the percentage of your available credit limit you’re using – also low, positively impacting your credit score.
Plus it helps to keep your checking account at a more accurate level.
Tip #13: Have your spouse apply for the same credit card
Known informally as the “two-player mode” amongst credit card hacking enthusiasts, having your spouse or partner apply for the same credit card can be an effective strategy to earn double the sign-up bonus. This approach is based on the idea that instead of just adding your spouse or partner as an authorized user to your card, they should apply separately.
For instance, if a card like the Chase Sapphire Preferred® offers a 50,000 points bonus on sign-up, both partners can potentially earn up to 100,000 points collectively, essentially doubling the bonus.
But remember, this hack should be used strategically – you should stagger your card applications and ensure each of you fulfills the spending criteria to qualify for the bonus.
Tip #14 – Importance of prompt payment
Quite possibly the hack with the most significant impact on both your credit score and your pocket, prompt payment of your credit card bill cannot be overstated.
Making on-time payments can drastically improve your credit score since your payment history is the most heavily-weighted factor that credit scoring models consider.
Plus paying your balance in full each month can help you avoid interest charges and penalties, effectively saving you money in the long run.
Tip #15 – Know What Rewards you Want
Rewards such as travel miles, discounts at partnered retailers, cashback, or access to premium experiences like airport lounges or concert tickets are available, depending on your card.
By understanding and leveraging these varied rewards, you can get the most excellent value out of your credit card expenses.
Cautionary Advice on Credit Card Hacks
While credit card hacks can undoubtedly offer substantial benefits when done right, pitfalls can ensue if one isn’t careful.
Pitfall #1 – Overspending
For starters, these hacks can inadvertently lead to overspending or unnecessary purchases. Be wary of making purchases you don’t need or can’t afford in an attempt to earn more rewards or meet the spend necessary for a sign-up bonus.
Consequently, the pursuit of credit card rewards could also lead to accumulated debt if you’re not diligent about paying off your balance in full each month. The interest that you need to pay on balances carried over can easily eat up the value of any rewards earned.
Pitfall #2 – Impact on your Credit Score
Applying for multiple cards can lead to hard inquiries on your credit report, which can temporarily lower your credit score. Similarly, canceling cards after acquiring the sign-up bonus could harm your credit utilization ratio and your length of credit history, both key factors in your credit score calculation.
Additionally, irresponsible habits like ‘credit card churning’ and ‘paying for everything with credit’ may risk your relationship with card issuers. Some companies might close accounts or even ban individuals from opening new ones if they’re perceived as abusing the system.
While some of the top-tier reward and travel credit cards often come with hefty annual fees, not all of them are worth paying. This is especially true when a card’s annual fees outstrip the value of the rewards earned.
Before you sign up for a credit card with an annual fee, it’s advised to read the fine print and estimate what you can earn from it. You should evaluate whether the perks, bonuses, rewards, and credits offered offset the annual fee cost.
Personally, I don’t use any cards that have an annual fee.
Pitfall #4 – Paying interest
Credit card interest can significantly impact your overall financial health if you’re not careful. The money invested toward paying it off could be better used elsewhere – for saving, investing, or spending on your needs and desires. Hence, one of the best “credit card hacks” out there is to simply stop paying interest.
You want to focus on debt free living.
Pitfall #5 – Avoiding counterproductive habits like “balance surfing”
Balance surfing is a strategy where you continually move credit card debt from one card with an ending 0% APR promotion to another card with a new 0% APR offer. While this approach can potentially delay interest payments, it can become a dangerous cycle if you find yourself simply transferring debt instead of reducing it.
Meanwhile, the total debt remains the same. Without a consistent debt repayment strategy, this method can lead to an endless cycle of balance surfing.
What are some of the best credit card rewards and hacks for 2024?
As we venture into the new year, some credit card reward strategies remain timeless while others evolve in response to new credit card offers and updated reward programs. In 2024, here are some of the best credit card hacks worth considering:
Take Advantage of Updated Card Offers: Credit card issuers frequently update their card offers and rewards programs. Ensure you stay updated on these changes to maximize your card benefits.
Focus on Cards with Flexible Reward Categories: Some cards, like the Bank of America® Customized Cash Rewards credit card, allow you to choose your highest cash-back category (like online shopping, dining, or grocery stores). These flexible category cards can be more advantageous as you can adapt them to your spending habits.
Leverage Rotating Categories: Cards like the Chase Freedom Flex℠ and Discover it® Cash Back offer 5% cash back on up to $1,500 in purchases in various categories that rotate each quarter, once you activate. Plan your spending in advance to leverage these rotating categories optimally.
Remain Alert on Loyalty Program Partnerships: Many credit cards and airlines have partnerships with other brands. This can mean increased rewards when shopping with those brands, so always watch for new partnerships or promotions.
Revisiting Annual Fees: If your credit card perks no longer justify its annual fee due to changes in lifestyle or spending habits, consider downgrading to a no-fee card from the same issuer. This way, you can save on annual fees without closing your account which could potentially harm your credit score.
Diversify Your Rewards: While it may be tempting to concentrate all your spending on a single card, diversifying your rewards can make you earn more. Consider employing a multi-card system to maximize rewards across different spending categories.
Your credit card should be a tool to enhance your financial flexibility, not a burden that leads to financial stress.
Frequently Asked Questions (FAQs)
Deciding whether to focus on paying off a single card or distributing payments over several cards can seem complicated, but there are a couple of methodologies to strategize your payoff.
The Debt Avalanche method suggests focusing on the card with the highest interest rate first. Once you’ve paid this card off in its entirety, you then move on to the card with the next highest interest rate. This can potentially save you more money in the long term as it targets high-interest debt first.
Alternatively, the Debt Snowball method, proposed by financial guru Dave Ramsey, recommends paying off the card with the smallest balance first, then moving on to the card with the second-smallest balance. While you may not save as much money in interest compared to the debt avalanche method, the psychological motivation of paying off a credit card balance entirely may be more important for maintaining consistent repayment.
Either method requires you to make minimum payments promptly on all cards to avoid late fees and possible credit score damage.
Getting credit card points without spending any additional money may seem like wishful thinking, but there are certain strategies that you can employ to achieve this. Strategically managing your credit cards can turn your everyday spending into reward points, miles, or cash back.
Referral Bonuses: Many credit card companies offer referral bonuses to their existing cardholders who refer friends or family members. If the person you referred gets approved for the card, you can earn bonus points.
Cardholder Perks: Credit card companies often run promotions offering bonus points for certain activities. These can range from enrolling in paperless billing, adding authorized users to your account, or completing an online financial education course. Check with your card issuer to view any current promotions.
Shopping Portals: Many credit card issuers, and even airline and hotel rewards programs, have their own online shopping portals where you can earn additional bonus points for every dollar spent. If you were already planning on making an online purchase, consider making it through these portals to earn extra rewards.
Sign-up Bonuses: Some cards offer sizeable sign-up bonuses for new cardholders who meet a required minimum spend within the first few months. Although this technically requires spending money, it doesn’t require spending more money if you use your card for purchases you were already planning to make.
While implementing certain credit card strategies can potentially earn you higher rewards or save money, they can also unintentionally harm your credit score if not executed responsibly.
Several factors can contribute to this potential downfall:
Opening and Closing Accounts: A high frequency of card applications can lead to multiple hard inquiries on your credit report, which might lower your score in the short term. Closing credit cards, especially older ones, can affect both your credit utilization ratio and the age of your credit history, two significant factors in your credit score calculation.
Carrying a Balance: Maintaining a high credit utilization ratio—i.e., carrying a large balance relative to your credit limit—can negatively impact your credit score.
Late Payments: If these deadlines are not strictly adhered to, they could result in late payments, which can seriously harm your credit score.
Excessive Spending: Some tactics lead to unnecessary spending to earn more reward points or meet an initial spend required for a sign-up bonus. Not only can this increase your credit utilization ratio and potentially lower your credit score, it can lead to debt if these balances are not paid off in time.
While both rewards cards and travel rewards cards offer perks to their users in return for spending, the primary difference lies in the kind of rewards they offer and their target user base.
A Rewards Card generally offers cash back, points, or miles for every dollar spent, redeemable in a variety of ways. This is the type of card I prefer. For example, you may redeem your accumulated rewards as cash back into your account, use them to purchase products or services, or exchange them for gift cards. The flexibility of rewards makes these cards are suitable for people with varied spending habits and prefer a variety of redemption options.
A Travel Rewards Card, on the other hand, is designed specifically for frequent travelers. These cards earn you points or miles on specific travel-related expenses, like booking flights or hotel stays. The redeemed rewards are typically used towards further travel-related expenses like airfare, hotel stays, or car rentals. Travel Rewards Cards often offer additional travel-centric perks like free checked bags, priority boarding, airport lounge access, and more.
Consider your spending habits, lifestyle, travel frequency, and preference in terms of reward redemption.
Protecting yourself from credit card fraud is an important aspect of managing your credit card usage effectively.
Monitor Your Accounts Regularly: Keep a thorough watch on your credit card statements for any unauthorized or suspicious charges. Report them to your credit card issuer as soon as possible.
Use Secure Networks: When making online purchases, only shop on secure websites (look for “https” in the web address), and avoid using public Wi-Fi networks for transactions.
Keep Your Personal Information Safe: It’s important to dispose of old credit card statements properly, and avoid giving out credit card information over the phone unless you initiated the call and you trust the recipient.
Protect Your PIN and Password: Don’t share these with anyone, and avoid using easily guessable combinations like birth dates or the last four digits of your social security number.
Enable Account Alerts: Most banks now offer optional security alerts that can be sent via text message or email whenever a charge above a certain amount gets made to your account.
Protect Your Computer and Phone: Make sure your devices are equipped with up-to-date antivirus software and that your phone is locked with a secure password or fingerprint identification.
In case you become a victim of credit card fraud, know the steps to protect yourself – report it to your bank or credit card company immediately, file a report with the Federal Trade Commission, and report it to the three major credit bureaus, requesting them to put a fraud alert or a credit freeze on your account.
Also remember, credit cards don’t have routing numbers.
Making the Most of Credit Card Hacking
When used wisely, credit card hacks and reward strategies can play a significant role in stretching your budget and rewarding your spending. These secrets of savvy credit card use — from aligning your card to your spending habits, making the most of sign-up bonuses and reward categories, to understanding the ins and outs of your credit card’s rewards structure — can help maximize your potential rewards and save money.
Personally, we use all of our credit card rewards to pay for our travel expenses.
However, it’s paramount to remember that these tips and tactics should not encourage unnecessary spending or carrying a balance. Only spend within your means, ensure you pay off your balances each month to avoid interest charges and remember to safeguard your credit score by handling credit card applications and closures cautiously.
Ultimately, credit card hacks and rewards should fit within your overall financial plan and goals, adding value to your everyday spending habits and rewarding you for well-managed financial practices.
Remember your goal is to reach your FI number.
Source
Reddit. “American Express Clawing Back Points Earned From Gift Card Purchases.” https://www.reddit.com/r/AmexPlatinum/comments/14hywaq/american_express_clawing_back_points_earned_from/. Accessed January 19, 2024.
CNN. “What is the Chase 5/24 rule?” https://www.cnn.com/cnn-underscored/money/chase-5-24-rule#:~:text=The%205%2F24%20rule%20is,your%20approval%20odds%20with%20Chase. Accessed January 19, 2024.
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
With most things in life, what’s “best” is inherently subjective and depends on each person’s needs and perspective. It’s no different with credit cards. Even a card with tons of great perks won’t be the right fit for everyone.
When we pick the best credit cards each year, sometimes old winners are surpassed by new cards with superior benefits. In other instances, our picks reflect the new priorities of the people most likely to use the cards.
The three new winners in 2024 reflect both types of changes. Here are the cards that won and why they earned our votes this year.
Category: Best balance transfer credit card
Why the Citi Simplicity® Card won: Basic math tells the tale of the Citi Simplicity® Card’s triumph over last year’s winner, BankAmericard® credit card. The Citi Simplicity® Card gives cardholders 21 months without interest on balance transfers compared with 18 billing cycles on the BankAmericard® credit card.
The balance transfer fee on both cards is 3%, the industry standard. Note, however, that the transfer fee on the Citi Simplicity® Card increases to 5% if the balance transfer is made after the first four months of account opening.
As an added bonus, the Citi Simplicity® Card doesn’t charge late fees. Other cards, including the BankAmericard® credit card, can charge as much as $40 for a single late payment.
Category: Best airline credit card
Why the United℠ Explorer Card won: The Delta SkyMiles® Gold American Express Card had a long run as our top pick for airline credit card, and for good reason. Its perk of a free checked bag for you and up to eight (eight!) traveling companions each time you fly Delta is unmatched. Terms apply. But this year we named the United℠ Explorer Card as the 2024 winner by virtue of its credits and lounge access.
The United℠ Explorer Card offers up to a $100 credit every four years for Global Entry, TSA PreCheck or NEXUS, a nice perk that gets you through airport security faster. You can get a $100 statement credit with the Delta Gold, too — but you’ll have to spend a lofty $10,000 to qualify, and it’s only good toward a Delta flight.
United℠ Explorer Card holders also get two lounge passes a year, good for entry into any of the over 45 United Club lounges. For a mid-tier travel card, that’s a really luxurious benefit. By contrast, the Delta SkyMiles® Gold American Express Card eliminated the ability to access the lounge for a $29 fee (and other Delta cards will restrict lounge access in the future).
Category: Best credit card for college students
Why the Discover it® Student Chrome won: Yes, the Capital One SavorOne Student Cash Rewards Credit Card has a higher rewards rate in some eligible spending categories than the Discover it® Student Chrome. The Discover card earns 2% cash back at gas stations and restaurants up to $1,000 in combined purchases each quarter; 1% thereafter. The Capital One card earns 3% cash back on several popular spending categories, including dining and purchases at grocery stores, but it lacks some key benefits that appeal to many students. The Discover it® Student Chrome offers:
A waiver on the first late payment fee.
A breather on interest for new purchases. The card has the following promotional APR: 0% intro APR on Purchases for 6 months and 10.99% intro APR on Balance Transfers for 6 months, and then the ongoing APR of 18.24%-27.24% Variable APR. A break from interest, even for just a semester, can be a big help in financing major purchases like textbooks.
A potentially big sign-up bonus. The Discover it® Student Chrome has the same welcome offer found in any one of Discover’s nonstudent cards: INTRO OFFER: Unlimited Cashback Match for all new cardmembers – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! So you could turn $50 cash back into $100. Or turn $100 cash back into $200. There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match. Say you spent $300 a month on your Student Chrome. Assuming a 1% cash back rate, you would come away with $72 by your account anniversary.
It’s now possible to activate all 5% category credit cards for the first quarter of 2024, including the Chase Freedom, Chase Freedom Flex, Discover IT, Citi Dividend, US Bank Cash+ and some smaller cards. In this post we’ll provide the activation link for each card and links to track your spend, along with strategies to help increase spend in these categories.
Dates: January 1st – March 31, 2024. Store purchases can usually be done until the last minute while online purchases should be given a buffer zone of a day or two.
Chase Freedom – Grocery, Fitness, Gym, Spa
Activation Link / FAQ / Sample Stores & Exclusions / Our original post
With the Freedom and Freedom Flex cards, activate to earn 5% back this quarter on up to $1,500 in spend at Grocery Stores, Fitness Club & Gym Memberships, Self-Care & Spa Services.
Grocery Stores – This is always a favorite since we all shop for groceries. Plus, you can max this out by purchasing gift cards to other retailers.
The terms exclude Walmart and Target, though I believe in the past readers have said that these sometimes do get classified as a grocery store.
Merchants in this category include supermarkets, merchants that offer a full-service grocery line of merchandise including a deli and bakery, as well as smaller grocery stores.
Some merchants that sell grocery items are not included in this category; for example, larger stores that sell a wide variety of goods and groceries, such as warehouse clubs, discount stores and some smaller merchants such as drugstores, and merchants that specialize in only a few grocery items.
Purchases made at gas stations from merchants who also operate grocery stores are not included in this category.
Delivery service merchants will be included if they classify as a grocery store merchant.
Fitness Club & Gym Memberships
Merchants in this category include health clubs, exercise, or athletic facilities requiring membership and offering access to services related to physical fitness, such as fitness clubs, fitness centers, fitness studios, gyms, aerobics, cardio fitness and other services such as yoga and cross fit training.
Merchants that specialize in offering personalized or therapeutic services such as massage therapy, dietary and weight management counseling and personal training are not included in this category.
In addition, some merchants that sell a wide variety of general goods, which may include fitness or athletic apparel, sporting goods, dietary food, health food or similar supplements are not included in this category.
Also, certain lodging, hotel, motel, resort and central reservation services offering access to third party facilities that include fitness clubs or gyms are not included in this category unless they classify as a fitness club or gym membership merchant.
Self-Care & Spa Services
This category includes self-care and spa services, such as massages, spa treatments, manicures, tanning, and barber and salon services, purchased at merchant locations that specialize in providing these services.
Self-Care and spa services are typically provided by licensed professionals, however, services provided by medical professionals will not qualify.
Purchases of self-care and spa services at merchants that classify their location in another category, for example spa services purchased in a hotel, will not be included unless the merchant classifies the transactions in this category.
Purchases of related products and services, for example hair and skincare products purchased at a salon or an overnight stay at a spa, will also not be included unless the merchant classifies the transactions in this category.
Tip: Click this link (login required) to check how far you are along the $1,500.
Discover – Restaurants, Drugstores
Activation Link / Our original post
With your Discover card, activate to earn 5% back this quarter on up to $1,500 in purchases at Restaurants and Drugstores.
Restaurants – always a useful category
Drugstores – many pharmacies sell gift cards for a wide variety of retailers which is an option for maxing this out
Activate to earn 5% Cashback Bonus at Restaurants and Drug Stores from 1/1/24 (or the date which you activate 5%, whichever is later) through 3/31/24, on up to $1,500 in purchases. Restaurant purchases include those made at merchants classified as full-service restaurants, cafes, cafeterias, fast-food locations, and restaurant delivery services. Drug Store purchases include those made at stand-alone drug stores, pharmacies, online pharmacies, and some pharmacies located inside of retail stores.
Tip: Login, then click this link to see you how far along the $1,500 you are.
Citi Dividend – Amazon, Streaming
Landing Page | Our Original Post
With your Dividend card, activate to earn 5% back this quarter on Amazon and select streaming services. Citi is different than the other cards in that you have a $6,000 annual cap rather than a $1,500 quarterly cap. You can get 5% back on up to $6,000 in this quarter or you can save the entire amount for a different quarter, or you can use part up each quarter.
Amazon
Select Streaming Services – Includes the following cable, satellite, and streaming providers: Amazon Prime Video, Amazon Music, Apple Music, Disney+, DirecTV Stream, ESPN+, fuboTV, HBO Max, NBA League Pass, Netflix, Pandora, Paramount+, Showtime, Sling TV, Spotify, Starz, SiriusXM, Vudu, YouTube Red, YouTube TV, and Tidal.
US Bank Cash+/Elan – Select your Categories
Activation link | Merchant List | Our Original Post
U.S. Bank Cash+ and Elan Max offer 5% cash back in two categories, up to $2,000 combined total per quarter. Keep in mind that Car Rentals was recently replaced with TV, Internet, and Streaming Services.
Here are the current options:
TV, Internet, and Streaming Services
Home utilities
Select clothing stores
Cell phone providers
Electronic Stores
Gyms/Fitness
Fast food
Ground Transportation
Sporting goods
Department Stores
Furniture Stores
Movie theaters
Tip: Login here, then scroll down and click on the red “View Your Cash+ History” button.
Bank of America Customized Cash Rewards
Our Original Post
The Cash Rewards card from Bank of America offers 3% back on one selected category, up to $2,500 per quarter. If you don’t select anything it defaults to gas. Once you selected a category for one quarter, that remains your category in the future unless you change it. Each calendar month you can change it if you’d like, but you’re always limited to $2,500 for the entire quarter.
Gas and EV charging stations (default category)
Online Shopping; this category also includes cable, streaming, internet, and phone plan
Dining
Travel
Drug Stores
Home Improvement/Furnishings
This category is especially lucrative for those who have Preferred Rewards status with Bank of America which can get you 5.25% back on one of these categories at the higher relationship level.
Lots of useful categories here. Important note: the Cash Rewards card also offers 2% back at grocery stores and wholesale clubs up to $2,500 per quarter, and that $2,500 limit combines with the Category Selection limit. After spending $2,500, you’ll earn 1% back on everything.
Other Cards with 5% Category
Nusenda FCU – ADD ME
Landing Page | Our Original Post
Earn 5% this quarter on up to $1,500 in purchases on ADD ME
This is on top of the regular 1% for a total earn of 6% back. (apparently no longer the case?)
Abound CU – ADD ME
Landing page | Our Original Post
Abound Credit Union Visa Platinum card offers 5% on up to $2,000 on ADD ME purchases.
Langley FCU – Grocery, Wholesale & More
Landing Page | Our Original Post
Langley Federal Credit Union offers 5% back each month in one selected category, on up to $100 cash back total ($2,000 spend).
The category options at time of this writing: Streaming Services, Internet, Cable, Groceries & Wholesale Clubs, Department Stores
Vantage West [AZ] – Select your Category
Landing Page | Our Original Post
Get 5x points on the category of your choice, up to $1,500 per quarter. Eligible categories:
Safe Credit Union Cash Rewards Visa card offers 5% this quarter on your choice of one category each quarter (with no apparent limit). This quarter the categories are:
When the Canada-based BMO bank acquired Bank of the West, headquartered in the U.S., in 2021, American consumers gained access to BMO’s credit card portfolio, which includes personal and business cards.
As of this writing, BMO offers two cash-back cards, a travel card, a 0% APR/balance transfer card and a secured card. However, a BMO representative confirmed that the card offerings and current card benefits may change in early 2024.
Here’s what you need to know about these cards before deciding whether to apply for one.
🤓Nerdy Tip
While BMO offers business credit cards, this article covers only its personal credit card offerings.
For a break on interest: BMO Platinum Credit Card
If you need an extra-long reprieve from interest, your best option among the BMO cards is the Platinum Credit Card. For a $0 annual fee, cardholders get 0% APR on purchases and balance transfers for 15 months (as of this writing). There are two important caveats to these offers, though: You may lose the 0% APR benefit if you make a late payment, and the balance transfer must be completed within 90 days of account opening in order to get the 0% APR offer.
The balance transfer fee for all of BMO’s personal credit cards is $10 or 4% of the amount of the balance transfer, whichever amount is greater. BMO only allows balance transfers of credit card debt. And as is standard with most issuers, it doesn’t permit transfers between BMO accounts.
As balance transfer offers go, this is a decent one, but it’s possible to find credit cards with longer interest-free promotions. The Wells Fargo Reflect® Card, for instance, offers 0% intro APR for 21 months from account opening on purchases and qualifying balance transfers, and then the ongoing APR of 18.24%, 24.74%, or 29.99% Variable APR .
🤓Nerdy Tip
All of BMO’s publicly available personal credit cards offer cell phone protection plans. Cardholders are eligible for up to $400 in coverage except for Premium Rewards cardholders, who get up to $600 worth of coverage. To qualify for cell phone insurance, you must pay your cell phone bill with a qualifying BMO credit card. A $50 deductible is required for each claim.
For building credit: BMO Boost Secured Credit Card
BMO’s lone secured card requires a $25 annual fee and a minimum $300 security deposit. Those numbers are on the higher end compared with other secured cards. The Discover it® Secured Credit Card, for example, has a $0 annual fee and a $200 minimum security deposit — and it earns rewards, which the Boost Secured card does not.
However, the Boost Secured does offer two benefits rarely found in other cards for people with bad or limited credit: cell phone insurance and rental car insurance.
For travelers: BMO Premium Rewards Credit Card
The only travel card in BMO’s credit card portfolio, the Premium Rewards card, offers some solid perks for a $79 annual fee, which is waived the first year. Some highlights:
15% bonus points on your account anniversary (15% of total purchases made in the previous year).
A sign-up bonus of 35,000 bonus points when you spend $5,000 within 3 months of opening your account (as of this writing).
Access to over 850 airport VIP lounges worldwide with Priority Pass Select, plus two complimentary visits to participating lounges.
No foreign transaction fees.
Lost or damaged luggage insurance.
By comparison, the venerable Chase Sapphire Preferred® Card awards a 10% points bonus on each account anniversary and doesn’t come with lounge access, and its annual fee is slightly higher than the Premium Rewards card. However, unlike the BMO Premium Rewards card, the Chase Sapphire Preferred® Card features travel partners to which you can transfer your points, often for outsize value.
The Premium Rewards card also earns the following rewards in BMO’s proprietary currency, Flex Rewards:
3 Flex Rewards points per $1 spent on eligible dining, hotels and airfare (on up to $2,500 in combined spending each quarter), and 1x on all purchases after that.
1 Flex Rewards point per $1 spent on all other eligible purchases.
Flex Rewards points may be redeemed for flights, hotels, merchandise, gift cards and statement credits, among other options. Point values vary depending on the redemption; cardholders can check the redemption value at www.bmoflexrewards.com.
Flex Rewards points don’t expire, assuming your account remains in good standing with BMO.
For cash back: BMO Cash Back Credit Card and the BMO Platinum Rewards Credit Card
Two BMO cards would be good picks as cash-back cards. One earns direct cash back as a percentage of each purchase; the other earns BMO’s proprietary currency, Flex Rewards, which can be redeemed for cash back in the form of statement credit.
BMO Cash Back Credit Card
For straightforward cash-back rewards, the aptly named BMO Cash Back Credit Card is probably the better choice. It has the higher rewards rates, and the rewards categories represent a range of everyday spending. The $0-annual-fee Cash Back card earns:
5% cash back on eligible streaming, cable TV and satellite services.
3% cash back on eligible gas and grocery purchases, up to $2,500 in combined quarterly spending (1% after that).
1% cash back on all other eligible purchases.
The only redemption option is a statement credit. Rewards never expire as long as the account is open and in good standing.
As of this writing, the card also comes with the following sign-up bonus: Get a $200 cash-back bonus when you spend $2,000 within 3 months of opening your account.
BMO Platinum Rewards Credit Card
The Platinum Rewards card, like its Cash Back sibling, earns rewards on gas and groceries, but the rewards rates on the Platinum Rewards card are a hair lower. It earns:
2 Flex Rewards points per $1 spent on eligible gas and groceries, up to $2,500 in combined spending each calendar quarter (1x on all purchases after that).
1 Flex Rewards point per $1 spent on all other eligible purchases.
Redemption options for the Platinum Rewards card are the same as the Premium Rewards card because both cards earn Flex Rewards.
In favor of the Platinum Rewards card, its annual fee is also $0, and it has a good welcome offer: Get 25,000 bonus points when you spend $2,000 within 3 months of opening your account. It also gives cardholders a points bonus every account anniversary equal to 10% of the total points earned in the past year. The Cash Back card doesn’t award an annual bonus.
These are both decent options for cash back. But if you’d prefer a simple, high flat rate back on everything, without the need to keep track of bonus categories, you could consider a product like the Citi Double Cash® Card. It earns 2% cash back on every purchase: 1% back when you buy, 1% back when you pay it back.
The card has a $0 annual fee, and it also offers a 0% intro APR on Balance Transfers for 18 months, and then the ongoing APR of 19.24%-29.24% Variable APR.
Who doesn’t want to be rewarded?
Create a NerdWallet account for personalized recommendations, and find the card that rewards you the most for your spending.
A penalty annual percentage rate (APR) is a heightened interest rate that can be issued if a person doesn’t use their credit card according to the card agreement. Card issuers explain the exact criteria that can lead to a penalty APR in multiple ways, like the terms and conditions section of a credit card application and in cardholder agreement documents.
A CD rate refers to the interest someone can earn on a certificate of deposit over time.
Key Takeaways:
Banks provide the criteria for issuing penalty APRs in their cardholder agreement documents.
APRs only apply to a card’s balance at the end of a statement period.
Most penalty APRs last for a minimum of six months.
How Penalty APR Works
Bad credit card habits, such as routinely neglecting a minimum payment, can result in a penalty interest rate. Penalty APR usually maxes out at 29.99 percent, which can still be manageable with the proper know-how.
Let’s say you have a 29.99% penalty APR and a statement balance of $500 on your card. To figure out how much interest you’d have to pay, divide 29.99 by 12 (representing each month of the year). You would get 2.499, which you can then divide by 100 to get 0.02499. Multiply your $500 balance by 0.02499, and you would owe $12.49 in interest for the month.
Some issuers base things on a daily periodic rate, so you’d divide the APR by 365 instead of 12, then follow the remaining steps.
How to Avoid Paying the Penalty Rate
Remember that you only have to pay interest on a card if you have an outstanding balance by the end of the statement period. If you manage to completely pay off your balance, your 29.99% penalty APR won’t generate any interest.
How Long Will a Penalty Rate Last?
According to the Consumer Financial Protection Bureau, credit card issuers must reconsider a cardholder’s penalty interest rates after six months. So, as long as you make the minimum payment amount six consecutive times, your interest rate will likely return to normal on existing balances.
These rules apply to consumer credit cards, not those issued to small businesses. With a small business card, several infractions can lead to a penalty interest rate. These can include missing a single payment, spending over the credit limit, or having payment returned for insufficient funds.
Business credit cards are largely exempted from the CARD Act, so each issuer may have different rules about how and when cardholders may have their penalty interest rates cleared. Small business credit cardholders facing penalty interest rates should contact their card issuer for more information.
Steps to Take If You’re Paying Penalty APR
While it may be disheartening to receive a penalty APR, it’s entirely possible to manage this change. Here are several actionable steps you can take when you’re dealing with a penalty APR:
Make your minimum payments: Consistently making your minimum payments will keep your credit score from dropping and display financial responsibility to your card lender.
Limit your credit card usage: Only use your credit card for essentials when managing a penalty APR. If your penalized card is linked to any subscriptions, consider canceling them for now.
Use autopay: Use autopay to ensure that you don’t accidentally miss your minimum payments.
Meet with a financial advisor: Financial advisors can offer tailor-made personal finance advice to help you with your unique circumstances.
Do All Credit Cards Have a Penalty APR?
While there’s no such thing as a good credit penalty APR, some cards have much more manageable interest rates than others. Moreover, some cards never impose higher rates on delinquent cardholders.
Examples of cards without a penalty interest rate include the PenFed Promise, the Discover it®, and the Citi Simplicity®. There are no annual fees for these cards. On the other hand, the PenFed Promise and Citi Simplicity® have no . However, Discover it® does have a competitive cashback program.
Does Penalty APR Affect Credit Score?
A penalty APR won’t affect your credit score in and of itself. However, payment history makes up the largest portion of your credit scores, so the fact that you’ve missed multiple payment dates could significantly decrease your credit standing.
Exceeding your credit limit can incur a penalty APR and increase your credit utilization ratio—which compares your current account balances with your total credit limit. Professionals urge cardholders to stay below a 30% utilization rate, which would be $300 out of a $1,000 credit limit.
Learn More About Personal Finance at Credit.com
Penalty APRs are just one aspect of credit card usage and personal finance management that consumers should know about. Visit Credit.com today to learn more about other financial topics that may be relevant to you, now or in the future.
Merrick Bank issues credit cards designed for consumers who are building credit. Payment activity on the cards is reported to the three major credit bureaus, meaning careful card use can help you establish your credit over time.
Indeed, credit-building is the main benefit of the Merrick Bank credit cards. There are no other perks, like a 0% interest promotion or cash-back rewards. Plus, you may be on the hook for a few pricey fees, making other starter credit cards or cards for bad credit more appealing options to consider.
Here are five things to know about the Merrick Bank credit cards.
1. There are two Merrick Bank credit cards
Merrick Bank issues two credit cards:
The Merrick Bank Classic Secured Credit Card, which requires a security deposit of $200 to $3,000.
The Merrick Bank Double Your Line Credit Card, an unsecured card that automatically doubles your credit limit after the first seven months if you make at least the minimum payment on time each month.
2. You may need an offer by mail to apply
The Merrick Bank Double Your Line Credit Card requires a mailed offer before you can apply. Enter the certificate number that appears in the offer to start the application. You can also search for your certificate number by entering your last name, last four digits of your Social Security number and ZIP code on the card’s website.
You can apply for the Merrick Bank Classic Secured Credit Card online without a mail offer.
3. Get ready to pay some fees
For the Merrick Bank Classic Secured Credit Card,the annual fee is $36 for the first year, after which the fee is still $36, but it’s charged in monthly increments of $3. As of this writing, the APR is more than 22%.
Things get a little pricier with the Merrick Bank Double Your Line Credit Card. It charges high interest rates — as of this writing, the variable APR tops out at nearly 31%. Plus, there are a couple of potential fees you may have to pay depending on what Merrick Bank determines: a one-time account setup fee of $0 to $75, and an annual fee of $0 to $72 (billed at up to $6 monthly after the first year).
High interest rates and fees are common for unsecured credit cards for bad credit. However, depending on what you can qualify for, you may find other cards’ fees to be more affordable.
4. Neither card offers perks
The main benefit of both of these cards is access to credit and the ability to build credit through careful use. And the Merrick Bank Double Your Line Credit Card will, as its name implies, bump up your credit limit after a few months. Otherwise, there are no cash-back rewards or sign-up bonuses to sweeten the deal.
There are alternatives that offer more extras, even for those who are newer to credit-building. The Capital One Quicksilver Secured Cash Rewards Credit Card has a $0 annual fee and earns 1.5% cash back on all purchases. It has a $200 minimum deposit, and you can be automatically considered for a credit limit increase after six months.
The Discover it® Secured Credit Card also has a $0 annual fee and $200 minimum deposit. It earns 2% cash back at gas stations and restaurants on up to $1,000 in combined spending per quarter (then 1% back), and 1% cash back on everything else. New cardholders can also get this sign-up bonus: INTRO OFFER: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match.
5. There are no other Merrick Bank credit cards to graduate to
As you more firmly establish your credit history, you’ll potentially become eligible for a greater variety of credit cards, including rewards cards with more appealing benefits. However, you won’t be able to stick with Merrick Bank credit cards if you eventually want those extras. And even though unsecured cards are the typical next step after secured cards, the Merrick Bank Double Your Line Credit Card faces some serious competition from lower-fee cards with more to offer.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
Yes, it’s possible to get a credit card without a job, although you’ll usually still need a source of income. This could come from excess financial aid, Social Security, a spouse’s income, or other avenues.
Yes, you can get a credit card without a job—and sometimes, even with low credit. Life transitions, college, retirement, and many other life circumstances may mean you’re unemployed when applying for a credit card. Building and maintaining healthy credit is important during every stage of life, and you may be surprised how simple it is to obtain a credit card even if you aren’t earning a consistent wage.
From using alternative incomes to cosigning and more, here are four tips for how you can get a credit card with no job.
Table of contents:
1. Consider all forms of income
2. Leverage someone else when applying
3. Go for a secured credit card
4. Make sure you can pay your balance
FAQ
1. Consider all forms of income
Ultimately, lenders care more about your income than they do about your salary. This means that qualifying for a credit card—even if you aren’t receiving a consistent wage—is completely feasible. Consider all income you have access to when applying for a credit card, no matter what stage of life you’re in.
If you’re a student
When you’re applying for a credit card as a student without a job, you can report any extra student aid that isn’t going toward tuition as “income.” This may help you qualify for a credit card.
If you have an employed spouse
Thanks to the Credit Card Act of 2009, those who are over 21 can report household income that they have access to when applying for a credit card. This means that you can report your spouse or partner’s income if you have a joint bank account or if they transfer an amount of money to you every month.
If you’ve lost your job
After losing a job, you’ll want to avoid overextending your budget. However, a credit card can still be a useful safety net in case of an unforeseen situation when funds are tight. You can report unemployment and severance as income when applying.
If you’re retired
You may also report any non-wage income when applying for a credit card. If you’re not working, this could be interest, dividends or Social Security payments. Ideally, retirees have had a long time to build up a solid credit history, so getting qualified for a credit card shouldn’t be difficult.
2. Leverage someone else when applying
We all need a little help from time to time. If they’re willing, friends and family with good credit may be able to cosign or add you as an authorized user on their credit card.
Have someone cosign
Although it’s a big favor to ask someone, having a parent or trusted close friend cosign on a credit card is a great way to qualify if your own credit history isn’t sufficient. If you choose this route, it’s doubly important that you make on-time payments each month—otherwise, you jeopardize both your own credit score and your co-signer’s.
Become an authorized user
If you still live with your parents, you may want to consider asking them to add you as an authorized user on their card. You can then use their credit card to make purchases and pay them the amount you spent. Although the card won’t be yours, as long as the primary cardholder makes consistent payments, the effects to your credit score will likely be positive. This option is best for those looking to build credit—but if you’re looking for a card of your own, a secured card may be better.
3. Go for a secured credit card
If you’re unable to meet the criteria to qualify for an unsecured credit card, you may want to explore secured options. Although uncommon—secured cards make up less than one percent of all consumer credit cards—they’re a great place to start.
A secured credit card is a card with relatively small maximums that borrowers can qualify for with a refundable safety deposit. The creditor may then use the deposit as collateral in case you are unable to pay back the balance.
New borrowers, those with poor credit or those without a steady income may find it easier to qualify for unsecured credit cards, as they’re seen as less risky by lenders. Two common secured credit card options are:
Discover It Secured Card: There’s no annual fee, and you get two percent cash back at restaurants and gas stations and one percent back everywhere else.
Capital One Secured Mastercard: A deposit as low as $49 gets you a credit limit of $200, and you are eligible for higher credit limits in as little as six months.
4. Make sure you can pay your balance
Remember that if you’re applying for a credit card without a job, you must be able to pay off the balance. Avoid getting into a borrowing situation that will cause you to carry over a large balance month to month, as credit card interest can get expensive.
Additionally, if you’re in college with student loans, credit card debt can be an extra burden on your debt load. In fact, a 2021 report found that credit card debt was the number one source of financial stress for college students, even above student loan debts.
As long as you don’t charge more than you can afford, unemployment doesn’t have to be a barrier to credit building. By ensuring a responsible, on-time repayment plan, you’ll set yourself up for credit success early on.
FAQ
If you have other questions about getting a credit card while unemployed, check out our answers to these commonly asked questions.
Does unemployment affect your credit?
Unemployment does not directly affect your credit. While your credit report does include your repayment history, it does not include your income, employment status, or whether you’ve filed for or received unemployment. If you need to apply for unemployment during hard times, don’t feel like you can’t.
However, if your job loss results in missed payments or overutilizing your credit card, these things could affect your score.
What’s a good annual income to get a credit card?
This depends on the issuer. While income won’t appear on your credit report or affect your credit score, issuers are still legally required to ask applicants their income per the Credit Card Act of 2009. This helps ensure credit borrowers can repay their debts. However, issuers set their own credit application requirements, and no total gross income limit for credit cards exists.
Remember to only borrow what you can reasonably repay. If you’re applying for a credit card with no income of your own, consider alternative solutions, like becoming an authorized user on a spouse’s credit card.
What disqualifies you from getting a credit card?
Credit card application approvals are at the issuer’s discretion, but generally, you must be at least 18 years old to open an account under your own name. Between 18 and 21 years old, you’ll also need to provide proof of independent income or have an adult cosign. Otherwise, issuers can set their own income, credit score and other requirements.
Can students get a credit card with no job?
Yes! Students who receive financial aid in excess of their tuition costs can count this extra money as income on their credit card applications. If this isn’t enough to qualify, students can also ask their parents to cosign on the credit card application—or add them as an authorized user to a family card.
What should I put on my credit application for my occupation if I have no job?
You can simply enter homemaker, stay-at-home parent, or none. Remember, you don’t need a job to get a credit card, so being honest here won’t disqualify you. The same thing goes if you come to a question about your employer information: just be honest and put none.
For more ways to improve your credit, especially if you have questionable negative items on your credit report, learn more about the services at Lexington Law Firm—including how credit repair works.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Paola Bergauer
Associate Attorney
Paola Bergauer was born in San Jose, California then moved with her family to Hawaii and later Arizona.
In 2012 she earned a Bachelor’s degree in both Psychology and Political Science. In 2014 she graduated from Arizona Summit Law School earning her Juris Doctor. During law school, she had the opportunity to participate in externships where she was able to assist in the representation of clients who were pleading asylum in front of Immigration Court. Paola was also a senior staff editor in her law school’s Law Review. Prior to joining Lexington Law, Paola has worked in Immigration, Criminal Defense, and Personal Injury. Paola is licensed to practice in Arizona and is an Associate Attorney in the Phoenix office.
OneMain Financial’s BrightWay credit card, issued by WebBank, is designed for those with less-than-ideal credit. But in many ways, it’s a welcome change of pace from other cards in its class.
Yes, some BrightWay cardholders might have to pay an annual fee of up to $65. But there are no monthly maintenance fees or other “gotcha” costs, the card earns rewards and, perhaps most importantly, there is a clearly defined upgrade path to a better card with no annual fee, which takes the guesswork out of how and when cardholders can qualify for that version.
At the moment, however, the BrightWay credit cards are available by invitation only or through certain partner websites.
Here’s what you need to know about the OneMain Financial BrightWay credit card.
1. There are two versions of the BrightWay credit card
There are actually two BrightWay credit cards: the BrightWay card and the BrightWay+ card. Applicants may choose which version they apply for.
BrightWay card. For those building or rebuilding credit. Annual fee: $39 or $65.
BrightWay+ card. For those with more established credit. Annual fee: $0.
BrightWay cardholders can graduate to the BrightWay+ card with responsible credit use. (More on that process in the next section.)
🤓Nerdy Tip
For both BrightWay credit cards, the minimum credit limit upon opening an account is $300, while the maximum is $3,000.
2. The upgrade path is straightforward, if lengthy
Not only is it possible to upgrade from the BrightWay to the BrightWay+ credit card, but the process for doing so is also refreshingly clear. The transparency surrounding the upgrade process is a unique and customer-friendly feature.
BrightWay cardholders can be upgraded to the BrightWay+ card after they’ve notched four “Milestone Events.” OneMain Financial says a Milestone Event occurs when a cardholder has made six consecutive qualifying payments, which is defined as making at least the minimum payment by the due date. These four milestones don’t have to be earned consecutively to count toward an upgrade.
Given those parameters, a BrightWay cardholder could qualify for an upgrade in two years after opening an account.
Admittedly, that’s a relatively long time to wait for an upgrade to a better credit card. The Discover it® Secured Credit Card, by contrast, offers upgrades starting at seven months. But Discover isn’t as specific about its upgrade requirements as BrightWay.
3. Good credit habits can boost credit limit or lower APR
If you stick with a BrightWay card, it will reward you with incentives along the way. After achieving a Milestone Event, cardholders can choose one of two Milestone Benefits: a lower purchase APR or a higher credit limit. Note that APR cannot be reduced below 19.99%, and the credit limit cannot exceed $15,000.
Cardholders forfeit their Milestone Benefit if they don’t select one by the payment due date following the billing cycle that the Milestone Event was earned.
After cashing in on a Milestone Benefit, the number of qualifying payments resets to zero, and you can begin working toward another Milestone.
4. Both cards earn rewards
The BrightWay and BrightWay+ credit cards earn an unlimited 1% cash back on all purchases. Cash back is automatically redeemed for a statement credit at the end of each billing cycle.
Among credit cards for poor credit (credit scores of 629 or lower), those are solid rewards.
5. Foreign transaction fee is low
The foreign transaction fee on both BrightWay cards is 1%, which is lower than the 3% fee that many other non-travel-focused credit cards charge. Plus, as a Mastercard, the BrightWay cards will be widely accepted around the globe.
That makes either BrightWay card a decent product for overseas purchases.