3 Credit Card Moves That Can Instantly Boost Your Buying Power
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Written by
Emily Sherman
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Edited by
Amen Oyiboke-Osifo
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Reviewed by
Jasmin Baron
Credit cards offer flexibility that debit cards can’t, giving users more time to pay off their purchases. Of course, this requires being careful not to charge more than you can afford to pay, thereby avoiding steep credit card interest rates. You can do this by paying your bill in full and on time every month.
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However, you’ll also need to keep your credit limit in mind when spending with a credit card. Not only can it cap how many purchases you can charge before you have to pay your bill, but a high credit utilization ratio can hurt your credit score. Sometimes, your credit limit can restrict how much you’re able to charge to credit — even if you can afford to pay your balances.
If your credit limit is limiting (pun intended) your spending power, there are a few strategies you can employ to leverage credit card perks for more.
Earn Rewards on Every Purchase
Credit card rewards can almost feel like free money. The best cards offer points or cash back rewards on all your purchases, which can then be redeemed to cover future spending. So the more rewards you earn, the more you can then spend on expenses without busting your budget.
To avoid overspending, you don’t want to buy things you don’t need just to earn rewards. That’ll just result in high credit card bills and potential interest charges.
Still, you can maximize your rewards earnings by using credit to cover all of your purchases — from gas to groceries or dining out — to make sure you earn cash back or points on all spending. Other strategies for earning more rewards include:
- Cover group purchases: Dining out with friends? Offer to cover the bill with your credit card and request a Venmo transfer or cash for their portion. That way, you get rewards on a much larger bill than if you’d just paid for your own, but you aren’t spending more than you can afford.
- Match the card to the purchase: While most rewards credit cards offer points or cash back on all your spending, the rate at which you earn those rewards will vary. For instance, one card might earn a high percentage of cash back on grocery spending but a much smaller amount on other charges. Another might reward travel or dining more highly. Make sure you swipe the right card for each expense, and consider choosing a credit card with a high earning rate in your biggest spend categories.
- Look out for fees: It can be tempting to charge some of your biggest purchases — say, your rent or utilities — to credit for the rewards. But for some of these charges, providers levy a fee for using a credit card instead of a debit card or a check. That fee could even be higher than the rewards you’d earn, essentially canceling out the benefit. Read the terms carefully before reaching for credit.
Take Advantage of Statement Credits
Did you know your credit card may have hidden perks you aren’t aware of? Several credit cards offer credits for certain kinds of purchases, which can save you money and allow you to allocate cash to other expenses. These credits may be limited-time offers exclusive to a particular card or issuer, or even be available across a wide range of cards.
For instance, anyone with a World Elite Mastercard credit card is eligible for monthly statement credits towards purchases with Peacock, Instacart and Lyft, among others.
While it may not sound like the most gripping read, your credit card’s guide to benefits will outline any of these kinds of perks applicable to you. Take the time to look through it.
Request a Credit Limit Increase
If your credit limit is too restrictive, you may be able to request a higher one from your card issuer. Increasing your credit limit boosts your spending power and may also help improve your credit score in tandem.
Eligibility for a credit limit increase depends on the card issuer, but having a good credit score is a strong start. Paying all your credit card bills on time also demonstrates responsibility to your card issuer.
If you meet these criteria — or even if you aren’t sure and want to give it a shot — you can call the number listed on the back of your card and request more credit. Be ready to explain why you are a responsible cardholder who can handle a higher limit. If all goes well, you can access more spending power. If not, you can always try again a few months down the line after improving your credit habits.
Bottom Line
Accessing more spending power can be as simple as cashing in on your credit card rewards or asking your issuer for more credit. Tread carefully, though — a higher limit can also be a temptation to overspend. No matter your credit limit, be careful not to charge more to credit than you can afford to pay off to avoid debt.
