Five Tasks to Complete Your Year-End Credit Card Checklist

December is a great time to maximize any credit card benefits that might reset or expire at year’s end. This is especially important if the annual fee covers these benefits. This is a great time to evaluate your spending habits and make sure that the card you are using is right for yourself.

This is an end-of year checklist to help you make sure your credit card is working for you.

Statement credits are available on some credit cards for specific types of spending. However, terms and expiration dates may apply. It’s usually a recurring credit that you have to use or lose.

It is important to find out if the recurring benefit is given annually. To ensure that your statement is updated on time, you should make your purchase at least a few days prior to that date. Instance charges that are not yet officially posted may not be eligible.

As with all credit card benefits, you shouldn’t spend too much on products or services that you don’t need or want in order to receive a discount.

Common credits are:

• General travel purchases: Most rewards cards offer travel credit to offset eligible purchases at hotels, airlines, cruise lines, and car rental agencies. The Chase Sapphire Preferred(r), Card offers a $50 annual credit for hotel bookings made through Chase Ultimate Rewards(r).

• Airline incidentals For example, the Hilton Honors American Express Aspire Card comes with $250 annually in airline incidental credits. You must enroll.

• Streaming: Credits are now commonplace for streaming services such as Spotify and Netflix. These credits are often distributed monthly. Deb Toner, an Albuquerque resident who works in the movie and TV industry, said that Hulu, HBO Max, and Paramount Plus are paid using streaming credits from the card. “Because I pay annual fees, I want every penny. ”

• Miscellaneous: Some cards offer credit at certain department stores, online retailers, or subscriptions. The American Express Platinum Card(r), is a good example. You get a range of miscellaneous credit options, including a $200 annual hotel credit for prepaid bookings through AmEx Travel as well as semi-annual credits towards purchases at Saks Fifth Avenue ($50), and Dell ($200). You must enroll. These terms apply.

You may be eligible for upgraded loyalty status, free night certificates, or other benefits if you spend a certain amount each year on your hotel and airline cards. Consider whether the bonus would be worth the extra spending you make on your card when you reach the bonus spending threshold. Before you chase the loyalty status and free-night certificates, make sure that you have a plan in place.

The World of Hyatt Credit Card gives you a free night at any Category 1 or 2 hotel when you spend $15,000 in a calendar year. You might consider prioritizing reaching that spending goal if you know that you are eligible for a free night certificate.

Many credit cards offer free trial periods for premium subscriptions to food delivery and rideshare services. Even though your trial does not expire at the end, it’s a good idea to review the promotion terms. If you aren’t interested in continuing the service, set a reminder on your calendar to cancel it before another year.

The Instacart Mastercard (r) gives you a year of Instacart+ free. These terms and conditions apply. This is a great perk for Instacart users, but the subscription will automatically renew for $99 after the first calendar year unless you opt-out.

Whether you get a free trial or not, it’s a great time to evaluate the services that you have already paid for to ensure they are still worthwhile.

To avoid overspending, it might be a better idea to keep your credit card in a drawer. However, many credit card issuers will close credit cards that are inactive for a long time. This can have serious consequences.

Credit utilization and credit history are two major factors that impact credit scores. Account closures can have a negative effect on both.

Credit utilization refers to the amount of credit you use. Ideally, you want this number to be low. It might be more difficult to close a credit line. In an email, Tom Quinn, vice-president of FICO Scores, stated that closing a credit line can reduce credit available and increase revolving usage. This could lead to a loss in points.

Depending on the age of the account, account closings can also affect your credit history.

Quinn stated that closing a revolving bank account does not confer a FICO score benefit.

Review your spending habits as the year ends to find out where your money is going. This is easy with your credit card statement.

Perhaps your spending has increased in certain areas, such as travel and grocery stores. You might want to consider switching cards that offer travel rewards or cash back. You might have big expenses in the coming year and you could use a different card to get a lucrative bonus.

It’s possible to make a difference in the coming year by identifying your spending habits and switching to the right credit cards.