How Credit Cards Can Help You Navigate Major Life Changes

When it comes to handling life’s major expenses, credit cards can be a valuable resource. Whether you’re furnishing a new home or covering unexpected medical costs, credit cards can provide financial flexibility when you need it most.

For example, Chris Hernandez, an investment advisor in Austin, Texas, shared a story of a client who used a credit card to pay for fertility treatments and ended up with both a sign-up bonus and a baby. This demonstrates how strategic credit card use can lead to unexpected rewards.

Credit cards not only offer lucrative rewards but also provide a convenient way to make necessary purchases and pay them back over time, potentially without accruing interest. By choosing the right card and using it wisely, you can make your money work harder for you.

Anticipating a large upcoming expense allows you to set a budget, compare prices, and save up gradually to avoid going into debt. It also gives you the opportunity to apply for a credit card with attractive new cardholder offers that can help offset the cost of your purchase.

Many cash-back and travel rewards credit cards offer sign-up bonuses that can be worth hundreds of dollars. By strategically planning a large purchase, such as an engagement ring or college tuition, you can meet the spending requirements to earn these valuable bonuses.

However, it’s important to pay off your credit card balance in full to avoid accruing interest that could negate the value of the bonus. If you plan to carry a balance, consider alternative credit card options with lower interest rates.

Credit cards with 0% APR promotions provide a window of time to pay off a large balance without accruing interest. By planning ahead and applying for a new card for your upcoming purchase, you can take advantage of this interest-free period.

Be sure to read the fine print of these offers to understand any potential fees or interest charges that may apply after the promotional period ends.

While credit cards can be a helpful resource for covering unexpected costs, it’s important to use them judiciously. Building an emergency fund and exploring credit card features designed for financial hardships can provide additional support during challenging times.

Features like grace periods and buy now, pay later options can give you flexibility in managing your expenses without incurring immediate interest charges.

By leveraging credit card rewards, balance transfer options, and unused points, you can effectively manage your expenses and reduce your overall financial burden. However, it’s important to approach credit card use with caution and have a clear plan for repayment to avoid falling into debt.