5 Ways Credit Cards Can Improve Your Mental Health

In a report on money and mental health conducted by Bankrate in collaboration with Psych Central, less than half of American adults say that money has a negative impact on their mental well-being. The ability to keep track of household supplies or daily expenses can cause a lot of stress. Combine that responsibility with an economic recession and high inflation, and it's no wonder many of us are feeling the heat.

Fortunately, there are still ways to control our finances. The strategic use of financial instruments such as credit cards makes our money work for us. With this tool in hand, we can definitely avoid these financial and psychological problems. Here are five ways credit cards can improve your mental health.

Pay off existing credit card debt.

Forty-eight percent of respondents to our survey said debt is a financial issue that negatively affects their mental health.

If you're looking for ways to pay off your debts faster and avoid additional interest for a while, a balance transfer might be a good idea. Some of the best bank transfer credit cards offer long 0% introductory APR offers on bank transfers. The current longest offer gives you 21 months (almost two years) to pay off your debt without additional interest.

Although balance transfer can be beneficial, there are some caveats. First, for every transfer you make, you have to pay a transfer fee, which can be anywhere from 3-5% of the transferred amount. It is also important to note that zero percent introductory APR offers expire. When the introductory APR expires, you will be charged interest on your card balance.

We recommend : Citi Simplicity® Card

Plan a free (or heavily discounted) vacation

Giving yourself a break and getting away from the daily routine is the key to mental well-being. If you play your cards right, you can use one of the best rewards credit cards to earn points and miles that get you free or discounted travel. To earn money, choose a rewards card that best suits your spending habits and use the rewards earnings to cover your expenses.

If you use some of the best travel credit cards, you'll see a lot of these types of benefits. Most of these cards give you the highest reward value for travel-related purchases. Some offer rewards on daily purchases. For example, you can earn enough points or miles over time to book an award flight or hotel stay.

The best rewards and travel cards often have annual fees, and you need to assess whether the annual fee is worth the benefits. However, don't assume that bad or fair credit qualifies you for a Travel Rewards credit card. The benefits and advantages of travel credit cards may be less for those with bad or fair credit, but there are options.

We recommend : Capital One Venture Rewards Credit Card

Save on everyday expenses

If a recession gets worse and inflation becomes more likely, your dollar might not rise as much. Cash back credit cards are one of the best ways to save money on everyday purchases. The key to using a cashback card to save is choosing the right card for your needs.

The easiest way to explain how cashback works is that every time you make a qualifying purchase, you get a percentage of your purchase back. The refund amount depends on the type of refund card you choose.

Flat and tiered or bonus category cards benefit people in different ways. If you prefer cash back on every purchase, you can opt for a prepaid cash back card. If you spend a lot in a particular spending category, a tiered or bonus category card that generously rewards that spending category may be your best bet.

Either way, cashback accumulates over time, and you can often use it for cashback credits, direct deposits, or online purchases.

We recommend : Capital One SavorOne Cash Rewards Credit Card

Build your credit

If you have strong credit, you head for better credit cards with higher rewards. Credit cards aside, good credit is important because it gets you some of the best interest rates available on car loans, mortgages, personal loans, and more. Better credit makes borrowing money more accessible (and possibly cheaper), and getting the money you need more easily can be good for your mental health.

One of the easiest ways to boost your credit is to use a starter credit card. These credit cards often have looser credit requirements and clear ways to help you build credit. Starter credit cards are often available for those without a credit history and are usually a good starting point for exploring credit cards. Credit cards for bad credit are different from credit cards for beginners. However, both have the same goal: to help you get a better credit score.

Many starter credit cards, credit cards with no credit history, and bad credit cards are secured, which means you have to put down a deposit to open the card. This deposit serves as a guarantee for the supplier to extend the line of credit. Often your deposit is your initial credit limit.

Not all credit cards designed for this audience are secure. You can choose an unsecured credit card. The main difference between the two is that an unsecured card does not require a deposit. However, the issuer may charge an annual fee or impose other strict requirements before approval.

We recommend the Get It® secure credit card

Study the cost of a major purchase

Our Bankrate survey cites insufficient emergency savings as the leading cause of negative mental health effects related to money. Whether you are prepared or not, emergencies do happen and can be costly. A credit card can be a great tool to have in your arsenal to protect yourself.

Zero percent credit cards have long introductory APR offers that give you time to pay off large purchases without additional interest. As with balance transfer cards, the longest introductory APR offers on purchases last for 21 months, or almost two years without interest payments. Again, once you sign up, you pay the card's standard ongoing interest rate on the balance you leave.

A long, interest-free offer on a card allows you to finance a large purchase or cover an unexpected expense without being immediately inundated with interest. Of course, plan to pay off that balance before the offer ends to get the most out of this credit card.

We recommend : BankAmericard® credit card

5 ways to be financially healthy