November 5, 2021
The idea behind a rewards card is simple: spend on your card and earn points based on how much you spend. Then you can redeem those points for travel, cash back, or other prizes.
Typically, rewards cards come with higher fees than other types of credit cards, and you can only earn points by putting expenses on your card consistently. But if you understand how to maximize your earned rewards, your points will offset those fees.
So are credit card rewards really worth it? Absolutely. Here are our favorite tips for making credit card rewards work for you.
Benefits of Using Credit Card Rewards
Maximizing your credit card rewards takes a little effort, but these cards carry lots of benefits, especially if you prefer to use your credit card for day-to-day expenses. Some of these benefits include:
- Hundreds of dollars in savings on travel and other items
- Hundreds of dollars in cashback rewards
- Purchase protection for travel rewards, including travel accident insurance, emergency cash replacement, and baggage insurance
- Extended warranties and strong fraud protection
- Some fee waivers
- A long payment history that builds credit
7 Ways to Maximize Your Credit Card Rewards
Rules are likely to vary according to your lender, so check with your card company for specifics.
1. Make Sure Your Card Is a Good Fit
Rewards won’t mean much if they don’t apply to your lifestyle and personal needs. For instance, if you enjoy travel, then sky miles and points on hotels are the way to go. But if you’re not much of a jetsetter, then you might prefer points you can redeem for tickets to games or shows. If you’re working on building savings, you might find cashback rewards better suit you.
This advice works best when you’re shopping for a new card. If it turns out you’re not satisfied with your current card, you could try the following:
Call your lender to ask for a product change. With a product change, your lender can switch you to a similar card with different perks. You can keep your payment history and any credit you’ve built over time while gaining better benefits. Just be sure to discuss any changes in terms or fees.
Retention offers are special incentives card lenders use to keep customers from canceling their cards, such as:
- Reduced or waived fees
- Bonus reward points
- Statement credits
If the offer is good, it may be worthwhile for you to keep your card. However, any offers may come with conditions like minimum spending requirements or keeping the card open for another year.
To get one of these offers, contact your card company and tell them you’re thinking of cancelling. Ask what they can offer you to stay.
New Card Offers
If you do decide to cancel your card, you can always open a new rewards card. This will allow you to take advantage of new card offers like bonus reward points, 0% introductory rates, and reduced annual fees.
Just be aware that closing your old card will impact your credit score. Not only will you lose the available credit on that card, but you’ll reduce the average age of your credit accounts.
2. Manage Your Points
You’re not going to use your reward points if you don’t keep up with them. Check on your reward balance a few times annually, taking note of how many you have, when they expire, and what they can be used toward. Remember to check when planning your annual vacation and as the holidays approach — it’s a great way to take the edge off a big purchase!
3. Spend, Spend, Spend
To earn enough points for the prizes you really want, you’ll need to use your card a lot. You can make routine purchases like groceries and gas with your card, or you can use your card to pay for utilities like power, water, phone plans, or internet (as allowed). Depending on the card’s terms, you might also do special shopping (like for holidays) on your card, too.
Many rewards cards have bonus categories that earn extra points for each purchase. Others earn more points from certain retailers. Know your card and make sure you factor the built-in bonuses when you’re shopping.
4. Pay Off Your Card
Never charge more on your card than you can pay off quickly. Running a balance on your card means you’ll end up paying high-interest charges that offset what you gained in rewards.
5. Add Card Offers to Your Account
Sometimes credit card lenders provide special discounts or bonus offers to their cardholders. You’ll need to opt into these offers by logging into your lender’s website and choosing to add useful offers to your card. You’ll then receive your discount or bonus as soon as you shop at a certain retailer or buy from affiliate websites.
Card offers are only good for a limited time and may not always be highly publicized by your lender. It’s a good habit to check for these offers each time you pay your credit card bill.
6. Time Large Purchases
If your credit card offers quarterly bonuses, time big purchases around them to receive the most points for your purchase. You may receive two, three, or four times as many points by timing your purchase correctly.
Also consider buying seasons. Big retailers often work with credit card companies to encourage off-season buying. If you can wait and time your purchase in this off-season, you can scoop up substantially more points for the same purchase. You may even earn points from your credit card company and the retailer if you sign up for their rewards program.
7. Utilize Shopping Portals
Online shopping portals are another way to earn even more points. Airlines and major retailers, for instance, often have their own portals. Signing up and making purchases through online shopping portals may earn you additional reward points on your credit card.
Some portals offer better returns than others, but you can find the best bonuses using Cashback Monitor to compare rewards across multiple portals.
How Do You Redeem Credit Card Rewards?
Most credit card providers establish online portals where customers can manage and redeem their reward points. Check your credit card statement or contact your credit card provider for your card’s portal.
Learning how to maximize your credit card rewards is worth the little time and research it takes. You’ll see your rewards accumulate faster, helping you earn the rewards you’re really after. And the more you put your rewards card to work wisely, the more it will work for you.