STOCK Credit card
Your budget isn't the only avenue to free up money. Combat global price rise with these 5 credit card perks. Image Credit: Shutterstock

Scaling back expenses isn't the only way to free up cash to cover essentials at a time when prices of certain goods and services rise in several parts of the world.

Credit cards can feature valuable perks for new applicants, whether your goal is to pay off debt or save on costs. Even if you already have a card, you may be sitting on targeted offers, rewards or benefits that could make a difference.

Here are some ways to maximise value from a credit card.

1. Introductory offers

If you've got good credit (a score of 690 or higher) and a big expense coming up, consider financing it with a credit card that offers a zero per cent intro annual percentage rate on purchases and a sign-up bonus. If you pay off the balance, you'll save on interest charges and potentially recoup some of the cost of the purchase with that bonus.

If you have good credit but want to pay off existing debt, a balance transfer credit card may lower costs. It allows you to transfer high-interest debt from another issuer and pay it off at a lower interest rate – ideally at a zero per cent rate for a period.

“There is going to be a (balance transfer) fee, so you have to shop around a lot of times,” said Melissa Cox, a US-based certified financial planner and advisor.

Aim for a fee of 3 per cent of the transferred balance or lower. Compare that fee with the cost of long-term interest payments on your current card to determine which option saves more money. If the balance transfer makes sense, plan for it.

“If you know that the transfer is going to be six months before the interest starts kicking in, you want to have a plan to get as much of that debt paid off in those six months,” Cox added.

You can typically find promotional periods for balance transfers that run under two years. And you may not need to apply for a new credit card to get such a deal as some card issuers provide targeted balance transfer offers to existing cardholders.

Fuel credit card
If your current credit card falls short on rewards for frequent spending categories like fuel, dining out or groceries, consider one that better aligns with your spending.

2. ‘Buy now, pay later’ options

Some major issuers have built-in ‘buy now, pay later’ options on their credit cards that let you pay off eligible purchases in instalments for a fixed fee or interest rate.

The predictability of these types of payments can make it easier to budget for them, and such plans could save you money if their fee or interest rate is cheaper than your card's normal annual interest rate. The plans don't require a credit check, and you can generally still earn rewards on purchases if the card offers them.

3. Rewards on purchases

A credit card that offers a rewards rate of 2 per cent back on all purchases – or 3 per cent or more back in specific categories – can help lessen the pain of rising prices.

For instance, let's say you spend $500 (about Dh2,000) a month at the supermarket. A credit card that earns 5 per cent back on groceries could net you $25 (about Dh100) back in rewards each billing cycle. Over the course of a year, that adds up.

If your current credit card falls short on rewards for frequent spending categories like fuel, dining out or groceries, consider one that better aligns with your spending.

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4. Merchant-specific discounts

Some major credit card issuers offer discounts or rebates when you use a credit card to shop with specific merchants in categories like everyday purchases, gifts, and travel.

These one-time offers may be found in your account or email, and you normally must ‘activate’ them or add them to your card.

You'll snag more value if the eligible credit card also earns rewards on the purchase.

Credit card shock
You'll snag more value if the eligible credit card also earns rewards on the purchase.

5. Other money-saving benefits

Money-saving benefits like cell phone insurance may be sitting in your wallet. You can get coverage for damaged or stolen devices up to a maximum amount when you use cards with this benefit to pay the monthly bill. There's typically a small deductible, and terms usually apply.

If your card lacks this perk, it may have others. For instance, you might have price protection, which refunds the difference in price of an item found advertised at a lower price elsewhere. To find out which benefits your credit card offers, contact the issuer, or log in to your account.

- Melissa Lambarena is a lead writer on the credit cards team at NerdWallet, covering credit card-related topics for over six years.