Getting a new card could work in your favor.
- Having a baby can change your life and your spending habits.
- It’s important to have credit cards that reward you handsomely for the purchases you make most often.
Before my husband and I had kids, we spent a fair amount of money on things like travel, dining, and entertainment. These days, we spend a fair amount of money on those categories as well. But when our children were babies, our expenses changed considerably. Instead of paying for three-course dinners and impromptu trips to Europe, we found that our credit card statements consisted largely of purchases of diapers, onesies, and copays from pediatricians.
If you’re having a baby this year, you may need to make a number of lifestyle adjustments. But you can also apply for a new credit card (or two) to account for anticipated changes in your spending.
The importance of having the right credit cards
The advantage of using credit cards is to accumulate cash back and reward points for the purchases you make. But once you have a baby, you can start spending money in all the new categories and stop spending money in others. It’s important to make sure your credit card rewards programs align with your purchases.
Let’s say you currently have a credit card that offers 3% cash back at restaurants. Well, once you have a baby, you might not end up going out to dinner as often. And then that credit card may not be of great value to you.
On the other hand, once you have a baby, you could end up spending a lot more money at grocery stores for baby food and supplies. In that case, it might make sense to apply for a credit card that offers extra cash back on grocery store purchases if your current credit cards aren’t very generous in that category.
Also, keep in mind that your overall costs of living can increase substantially once you have a baby, especially if you need to start paying for child care in order to continue working. It’s worth seeing if there are credit cards with better rewards programs than the ones you know about now. Getting even an extra $40 or $50 in cash during the year could go a long way at a time when you’re adjusting to a new set of expenses.
Finally, if you have annual fee credit cards, make sure you’ll keep using them once your baby arrives. And if not, cancel them. You might, for example, opt out of a travel rewards card if it comes with a fee and you don’t expect to travel much in the first year after having a baby.
There are certain financial moves worth making before you have a baby, like building your savings, reworking your budget and, if you don’t already have it, applying for life insurance. Likewise, it’s worth evaluating your credit cards before your baby is born and making sure your rewards programs fit into your new lifestyle. If not, you may want to apply for a new card or two before your baby shows up.
Once you have a baby, your expenses could change overnight. Having the right credit cards at your disposal could make it easier to adjust to all that glorious turmoil.
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