Credit card rewards are a valuable perk, but maximizing your points and miles requires careful strategy. It starts with evaluating the cards in your wallet and juggling them to align with your spending habits.
If you have a store card with bonus categories you rarely shop at or a cash back card that doesn’t fit your dining out spending, you could be missing out on opportunities.
Choose the Right Cards
The world of credit card rewards can feel overwhelming. But, by taking a close look at your regular spending patterns and applying some smart strategies, you can unlock the full potential of rewards programs.
Start by evaluating the cards in your wallet to determine which offer the best rewards for the types of purchases you make most frequently. If you dine out often, for example, consider a credit card that offers accelerated points or cash back on dining. Or, if you travel frequently, choose a credit card that rewards you based on the categories you spend most money in each month, such as airfare, hotels and restaurants, gas and groceries.
You might want to consider cards with a variety of redemption options as well, which can help you maximize your points’ value. For instance, some cards allow you to select the category in which you earn the most bonus points, while others rotate their categories by quarter. Also, be sure to factor in the value of each point — which varies by card issuer — and whether or not you’ll pay an annual fee for your reward credit cards.
Pay Your Bills on Time
The best credit card rewards cards can offer a ton of value, but only if you pay your credit card bills on time. If you don’t, the interest you pay could quickly eat up any rewards you earned.
Many credit card issuers reward you for purchasing certain things with their cards, often in the form of bonus points, miles or cash back. However, it’s easy to misinterpret or miss out on earning these rewards if you don’t fully understand your card’s terms and conditions.
There are some simple ways to maximize credit card rewards, such as selecting the right cards and adapting them to your spending habits. But there are also more in-depth strategies that can help you unlock the full potential of credit card rewards. These include maximizing the value of your cards, learning about redemption options and taking advantage of loyalty programs and other credit card benefits.
Pay Your Balance in Full Every Month
Credit card rewards can help you get more out of your spending habits, but only if you use your cards responsibly. If you carry a balance or spend beyond your budget, you will end up paying interest charges that can easily outweigh the benefits of rewards points.
The key to success with any credit card is to pay off your balance every month. In addition to helping you stay out of debt, this will also boost your credit score. Many people find that it is easiest to do this by scheduling a monthly bill due date just after their paycheck.
Another way to maximize credit card rewards is by using different cards for different categories of spending. For example, if you often dine out, consider using a credit card that offers top rewards on restaurant spending. You may also want to use a separate card for online shopping to take advantage of bonus points through shopping portals. Lastly, don’t forget to pay your card’s statement balance by the payment due date each month to avoid late fees and to prevent your credit utilization from increasing.
Redeem Points for Travel
One of the best ways to maximize your credit card rewards is by redeeming them for travel. You can do this by booking directly through your credit card issuer’s travel portal or by transferring points to airline and hotel partners.
By booking a flight with points, you can often get a better per-mile value than booking with cash. However, it’s important to do the math before using your points for a specific trip. Start by looking up prices for the flights you want to take and then dividing the cash price by the number of miles required.
The most important thing to remember when it comes to credit card rewards is that they should always align with your goals and lifestyle. Be sure to research all available cards and choose a program that suits your spending habits and brand/vendor preferences. And never overspend to earn rewards — doing so will likely only cost you money in the long run. The best rewards credit cards have high earning potential, competitive rates and as few common card fees as possible.
Track Your Spending
Getting the most out of credit card rewards requires strategic spending and attention to detail. Choosing the right cards, adapting your cards to your spending habits and understanding redemption options are key strategies for seeking to optimize credit card rewards.
For example, if you have multiple credit cards that earn bonus points on different categories of spending, try labeling your cards by the most popular categories to help keep track of which card is best for each purchase. Some cards also offer boosted point values when redeemed for certain travel options like airfare or hotel stays, so be sure to consider those options as well.
You can also maximize the value of your points by combining them with partner offers and shopping portals to earn extra miles or cash back. Finally, remember that the best credit card is one that you can responsibly pay off in full each month to avoid interest charges and keep your rewards in your pocket. The more mindful you are of your spending, the easier it will be to stick with a budget and stay out of debt.
