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How I'm Recession-Proofing My Budget With Credit Card Rewards

Farnoosh Torabi recommends streamlining your essential expenses on an everyday rewards card.

Farnoosh Torabi Former Editor at Large
Farnoosh Torabi is a financial strategist, host of the award-winning podcast So Money and a bestselling author.
Farnoosh Torabi
3 min read

If you haven't taken an inventory of your financial needs and goals lately, now's a better time than ever. 

Near-term recession expectations are at an all-time high, with many economists now predicting an economic slowdown in 2023 amidst stubbornly high inflation and escalating interest rates.

Preparing for a recession means sticking to a budget, paying down debt, and being more careful when making big spending decisions. It also means taking advantage of tools and resources that can help you save more along the way. 

For me, this includes utilizing rewards credit cards that offer cash back or points. Consider these five steps to get the most out of your rewards cards.

Pick and choose a rewards card carefully

There are thousands of credit cards on the market, each with their own unique set of offerings. When selecting a rewards card, it's important to shop with your lifestyle in mind and select a card with rewards that correlate to your biggest or most frequent expenses.  Also if cash is something you highly covet, narrow your search by reviewing cash-back cards only.  No matter what, always keep your eye out for annual fees, which can eat away at your rewards.

Load everyday expenses onto a single, best rewards card

Streamline and accumulate your essential expenses on an everyday rewards credit card that provides the greatest return on those expenditures. The Credit One Bank® Platinum X5 Visa® lets you earn 5% cash back rewards on the first $5,000 of eligible gas, grocery, internet, cable, satellite TV, and mobile phone service purchases each year, then 1% thereafter.

Pay balances in full – and on time

While a rewards card incentivizes us to spend, it's critical to not go overboard and fully pay the monthly balance on time. Otherwise, you're stuck paying interest (which is only rising in this recessionary market) and that may eat away at any of the rewards you receive. Not to mention, carrying a balance or falling behind on payments can drag down your credit score, which can result in less favorable terms and interest rates on future loans and lines of credit. 

Plan travel expenses in advance

When traveling for work or a personal vacation, I'll be sure to plan ahead so I can take advantage of intro offers and accumulate points. Those points may even lead to major savings on the next trip. The Wander® Card from Credit One Bank® offers 10 times the points on eligible hotels and car rentals booked using Credit One Bank's travel partner site, as well as five times the points on eligible travel including flights, dining, and gas purchases. The Wander card comes with a 10,000-point intro bonus after spending $1,000 on eligible purchases in the first 90 days. Those points can be redeemed for a $100 statement credit, gift card, or travel. 

Use points to avoid travel headaches  

Speaking of travel, one of the best money and time-saving hacks that I learned from Brian Kelly, a friend and founder of ThePointsGuy, is to use miles to reserve a backup seat when flying. With the potential for delays or cancellations, booking a second seat on another airline flight that departs a few hours later from the same airport is one way to create your own travel insurance, says Kelly. "In a worst-case scenario, if my original flight is delayed or canceled, I have that backup flight, because flights these days sell out," he said.  If you don't end up needing to use that substitute flight, you can cancel it and have your miles reinstalled for free, since most airlines have gotten rid of cancellation fees for bookings made with rewards.