Budgeting With a Credit Card: How and Why

At first glance, credit cards and budgets don't seem to be a likely duo. One encourages spending, the other is rooted in frugality.

But when you break down what a credit card can do, it's easy to see how it can be an important resource in your budgeting tool belt.

Credit cards make it easier to track spending, to set alerts for when you're approaching set spending limits, and many even earn rewards that can help free up some room in your carefully tailored budget.

How to budget with a credit card

Track your spending by category

If you want to set a budget and stick to it, it's important to know what you're spending money on. Credit cards make this easy by giving you direct access to all your credit card transactions. You get to see exactly how much money you're spending and what you're spending it on.

Even better, many credit card issuers provide you with ways to filter your spending by category in your online account. This can help you know which categories you tend to spend more in. If you find you're spending a lot on eating out, you can adjust your budget accordingly. Or you can use a credit card that earns rewards for purchases in your high-spend categories to help offset costs.

For example, it could make sense to use the Blue Cash Preferred^® Card from American Express if you're buying a lot of groceries. And for takeout and delivery purchases, the Chase Freedom Flex^® is an ideal option.

Use your cashback rewards to pad your budget

Credit cards are often associated with debt, but earning rewards with a credit card can help you stay on track with your budget. This is best done when you align a credit card with your specific lifestyle and spending habits.

As mentioned above, certain cards may have better earning rates for purchases in certain categories. So if you frequently visit the gas station, a credit card like the Costco Anywhere Visa^® Card by Citi, which earns 5% back on gas at Costco and 4% on other eligible gas and electric vehicle (EV) charging purchases for the first $7,000 combined spend per year, and then 1% thereafter, could be helpful.

Many cashback credit cards function similarly. You can use a card with specific earning potential according to your purchases or get a general cashback card like the Citi Double Cash^® Card to earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases; plus, earn 5% total cash back on hotel, car rentals and attractions booked with Citi Travel. But remember, you want to use credit cards for purchases you already plan to make.

Doing so will help you ensure you're spending only the money you need to spend while earning cash back at the same time. The cash back you earn acts as a discount on all your purchases, so it might help stretch your budget. Take a look at our list of the best cash back credit cards for more details.

Earn Cash Back Twice

Citi Double Cash^® Card

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Citi Double Cash^® Card

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Rates and fees

Current Offer

Earn $200 cash back after you spend $1,500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® Points, which can be redeemed for $200 cash back

Annual Fee

$0

Rewards Rate

2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases; plus, earn 5% total cash back on hotel, car rentals and attractions booked with Citi Travel

Benefits and Drawbacks

Benefits

• Simple flat-rate cash back on all your purchases
• 0% intro APR on balance transfers for 18 months, then 18.24% - 28.24% (Variable) APR
• No annual fee

Drawbacks

• 3% foreign transaction fee
• No introductory APR on purchases

Card Details

• Earn $200 cash back after you spend $1,500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® Points, which can be redeemed for $200 cash back.
• Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. To earn cash back, pay at least the minimum due on time. Plus, earn 5% total cash back on hotel, car rentals and attractions booked with Citi Travel.
• Balance Transfer Only Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will be 18.24% - 28.24%, based on your creditworthiness.
• Balance Transfers do not earn cash back. Intro APR does not apply to purchases.
• If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including balance transfers) by the due date each month.
• There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).

Read our full Citi Double Cash^® Card review.

Use travel rewards to finance vacations

The best travel credit cards typically earn travel rewards in place of cash back on your purchases. If you have travel-related savings goals, these types of cards can help you reach them without going over budget.

For example, many Chase credit cards earn Chase Ultimate Rewards points on purchases. These points can be redeemed for flights, hotel stays, car rentals, and more. Similarly, multiple American Express credit cards earn Amex Membership Rewards points, which can also be redeemed for flights, hotel stays, rental cars, and more.

Using travel credit cards on everyday purchases might help you fit a vacation or family trip into your budget without overspending. You aren't necessarily spending more money than you normally would, but you're earning valuable rewards on purchases.

Great for Flexible Travel Rewards

Chase Sapphire Preferred^® Card

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FinanceBuzz writers and editors score cards based on a number of objective features as well as our expert editorial assessment. Our partners do not influence how we rate products.

Chase Sapphire Preferred^® Card

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Rates and fees

Current Offer

Earn 75,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening.

Annual Fee

$95

Rewards Rate

5X points on travel purchased through Chase Travel℠; 3X points on dining, select streaming services, and online groceries; 2X points on all other travel purchases, and 1X points on all other purchases

Benefits and Drawbacks

Benefits

• Generous welcome offer valued at up to $1,125 when redeemed via Chase Travel℠
• High rewards on dining and bookings via Chase Travel
• Up to 1.5x more value when redeeming points for travel through Chase Travel
• Up to $50 in statement credits each account anniversary year for hotel stays booked through Chase Travel
• Receive valuable travel protections like trip delay reimbursement and primary rental car insurance

Drawbacks

• Has a $95 annual fee
• Doesn’t offer airport lounge access or premium travel perks like Global Entry or TSA PreCheck credit
• Doesn't offer bonus points on gas or in-person groceries purchases

Card Details

• Earn 75,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening.
• Enjoy benefits such as 5x on travel purchased through Chase Travel℠, 3x on dining, select streaming services and online groceries, 2x on all other travel purchases, 1x on all other purchases
• Earn up to $50 in statement credits each account anniversary year for hotel stays through Chase Travel℠
• 10% anniversary points boost - each account anniversary you'll earn bonus points equal to 10% of your total purchases made the previous year.
• Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
• Complimentary DashPass which unlocks $0 delivery fees & lower service fees for a min. of one year when you activate by 12/31/27. Plus, a $10 promo each month on non-restaurant orders.
• Member FDIC

Set spending alerts

Your online credit card account typically has an area where you can set up alert notifications. Getting notifications by email or text message could help you track your spending and stay on top of credit card payments. Available notifications might include when you're getting close to your credit limit or a specific amount you've set.

If you're budgeting to spend less than $800 each month on a card with a $1,000 credit limit, it could be helpful to set an alert notification for when you're at $600. This will help you know when you're getting close and whether you need to adjust your spending. It might also be helpful to set a reminder for when your credit card payment is due so you don't incur any late fees or negatively impact your credit score.

Set bills to autopay on your card

Because tracking your spending is part of budgeting, it's important to have a system for your monthly recurring bills. This could include a way to easily pay off cell phone bills, internet bills, and other utility bills.

Setting your bills to autopay with a credit card decreases your chances of missing payments. If you use a rewards credit card for automatic payments, you'll earn rewards at the same time. See our list of the best rewards credit cards for more details.

Use your card for specific purposes only

If you're worried about overspending on your credit card, consider using it only for specific expenses. Using your credit card for bills set to autopay is an easy way to not miss payments while earning credit card rewards. Using this method, you could set up autopay for the bills you want and never have to worry about carrying a credit card in your wallet.

However, keep in mind that using a rewards credit card for all your purchases will help you earn more rewards, which can potentially stretch your budget. If you want to work up to using a credit card on everything, consider using it only for groceries or only when you fill up your car to start. This can help you get in the habit of using and paying off your card over time.

Review spending trends over time

Part of tracking your spending with a credit card includes doing a thorough review of your spending trends over time. Frequent reviews of your spending are best, but to see a trend, you might need to review a few weeks or months' worth of transactions.

Also, if your credit card issuer offers a year-end summary of your spending, this is an excellent time to review your spending trends throughout the year. You may notice spikes in spending or times when you weren't spending as much.

Seeing the data behind your spending makes it easier to keep track of when and where you need to adjust your budget. If you didn't have this data, it could be difficult to see if you ever needed to adjust anything, and you might end up spending more than your budget allows.

Lower Your Monthly Bills

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Rocket Money Benefits

• Helps to find and cancel subscriptions
• Slash your monthly phone, cable, and internet bills
• Save an average of up to $720 a year

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Lower your bills

Bottom line

Credit cards don't have to be a financial burden. If you know how to use them, they can become one of your best financial assets, especially if you're budgeting.

It's not always easy to learn how to manage your money, which is why it's important to take advantage of financial resources if you can. As you consider your financial situation and what you want to accomplish with a budget, think about how you can use credit cards to achieve your goals.

While you're at it, have a look at our list of the best budgeting apps for more tools that can help you to better manage your money.

2025 award winner Best Overall Cash Back Credit Card

Wells Fargo Active Cash^® Card

Benefits

Card Details

• Low spend threshold for its welcome offer — $200 cash rewards bonus after spending $500 in purchases in the first 3 months
• Cell phone protection benefit (subject to a $25 deductible)
• Can redeem rewards at an ATM for literal cash
• Apply Now

• Apply Now to take advantage of this offer and learn more about product features, terms and conditions.
• Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months.
• Earn unlimited 2% cash rewards on purchases.
• 0% intro APR for 12 months from account opening on purchases and qualifying balance transfers. 19.24%, 24.24%, or 29.24% Variable APR thereafter; balance transfers made within 120 days qualify for the intro rate and fee of 3% then a BT fee of up to 5%, min: $5.
• $0 annual fee.
• No categories to track or remember and cash rewards don’t expire as long as your account remains open.
• Find tickets to top sports and entertainment events, book travel, make dinner reservations and more with your complimentary 24/7 Visa Signature® Concierge.
• Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.

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Apply Now

on Wells Fargo’s secure website

Rates and fees

Read Card Review

Intro Offer

$200 cash rewards bonus after spending $500 in purchases in the first 3 months

Annual Fee

$0

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Why we like it

• If you love earning cash rewards but prefer to avoid the hassle of tracking spending categories, the Wells Fargo Active Cash^® Card could be a good option for you. Cardmembers can earn unlimited 2% cash rewards on purchases.

• This card also offers a 0% intro APR on qualifying balance transfers and purchases for 12 months from account opening, then 19.24%, 24.24%, or 29.24% Variable. Those looking for straightforward rewards and an introductory APR will likely find value in this card.

• Apply Now