Budgeting with your Credit Card
Six ways to set up and stick to a budget using your Credit Card
Budgeting with your Credit Card can help you manage expenses and save money on your everyday spending. By using Credit Cards strategically, you can manage your money and earn rewards, as well as handle unexpected expenses.
Here’s how to budget with a Credit Card.
1. Set spending limits.
Set your Credit Card limit to match your budget. For example, if you allocate $1,000 monthly for groceries, transportation, and utilities, keep your Credit Card limit at $1,000 to enforce that budget. This will help you stay within your financial means and avoid overspending. If you’re an American Express® Card Member, you can set Card Alerts to be notified when you approach your limits. It might also be a clever idea to check your Credit Card statements and transactions. Reviewing your spending habits helps you spot areas you might be overspending in, so you can adjust your budget (or spending habits) accordingly.
2. Choose the right Credit Cards
Selecting Credit Cards that match your spending habits and financial goals is essential. Look for Cards that offer interest rates and benefits that align with your lifestyle, such as credit back to your account on groceries or travel rewards. Consider closing accounts that aren’t beneficial and sign up for no or low annual fee cards instead to reduce costs.
3. Leverage rewards
Pick Cards that offer credit back to your account, allow you to cover charges with points1 or rewards that will help you gain additional financial flexibility. Regularly redeem your Points and make the most of rewards to save on spending, helping you hit your savings goals, pay down debt or build an emergency fund.To maximise rewards, use your Card to pay for frequent purchases, like groceries, as well as significant buys, like new furniture. And remember to track your spending and pay off your balances promptly.
4. Take advantage of the interest-free grace periods
Take advantage of your Card’s interest-free grace period to pay off your balance and avoid accruing interest on purchases. This practice will also help free up cash in your bank account for unexpected costs, like a car repair, or enable you to save towards your larger financial goals.
5. Get an Additional Credit Card
Add an Additional Card2 for your partner or family member to consolidate spending under one single account and enjoy the same benefits. This can be helpful to track household expenses and to keep on top of budget status. If your budget allows, you may want to assign specific cards for different spending categories, like groceries or bills to prevent overspending in specific areas. Find out more about applying for an Additional Card.
6. Pay off your Credit Card balance regularly
Last, but certainly not least: don’t just make the minimum payment every time. All these tips are great, but the only way to truly make your budget stick is to frequently pay down your balance and avoid paying interest. Following this practice could also help you build your credit score, so it’s a win-win. Explore all American Express Cards to find the best option for your financial needs.
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- Cover Charges with Points. For each successful transaction with cover charges with points, points will be debited from your Membership Rewards account and a credit placed on your Card. A minimum of 1,000 Membership Rewards points is required to cover any eligible transaction with points. Account cannot be in credit when using cover charges with points. A credit will appear on your statement identified as “Membership Rewards Credit”. Points will be debited immediately and the credit will take up to 2-4 business days. to appear online. Credits processed after the Card account’s statement closing date will appear in the following statement. You are still responsible for payment of the amount due on your Card account by the due date. Any charges covered by points is not redeemable for cash via Credit balance refund. American Express will select and display each eligible charge that can be covered with points (“Eligible Charge”) and the points rate required to cover the Eligible Charge. Each Eligible Charge must: (a) appear within the Online Statement of the Summary of Accounts page; (b) be redeemed within 2 months of the charge appearing on your Card account; (c) not currently or have previously been disputed; and (d) not be a fee. View full terms and conditions here.
- Additional Card Members.Additional Card Members must be 16 years of age or over. The Primary Card Member will be liable to pay for all transactions made by Additional Card Members. Earning of points is subject to the terms and conditions of the Rewards Program the Primary Card Member is actively enrolled. All points earned on Additional Card Member spend will go to the Primary Card Members Account. View full terms and conditions here.