How to Maximize Credit Card Rewards
Credit card rewards are all the rage right now, and why wouldn’t they be? It’s free money credit card companies give you just for using their card. Different cards offer different perks, so it can pay to have a few different ones. In this article, you’ll discover how to maximized your credit card rewards to earn more money back!
Analyze different cards
Does your card only offer a straight 1% cash back? If so, that’s a good start, but there are better options available. Some cards offer up to 2% cashback on all purchases, and others offer different amounts for different kinds of purchases.
Start by looking at your past spending. Do you find that most of your money is spent on dining and entertainment? If so, maybe the Capital One Saver card is right for you. It offers 4% cashback on dining and entertainment, making your next date night that much more exciting. Are you a frequent traveler who exclusively flies with a specific airline? Check out the airline’s credit card options. Delta has some attractive card for frequent Delta travelers, but sometimes it might be better to go unbranded. With free checked bags and upgraded seats when available, the Delta America Express might be your best bet.
Don’t use one card
With all the different options available, you’ll find that different cards typically offer one specific area they are best in and are average for all other categories. You can use this to your advantage. While we don’t recommend signing up for every card you can get your hands on, we would recommend spreading the wealth to have a few different cards for your highest spending categories. For example, you could have one card dedicated toward dining and entertainment, another card dedicated to groceries and gas stations, and one final card dedicated to traveling. By spending on each card at its respective category, you can watch the points pile up!
TIP: Don’t sign up for multiple cards at the same time. This can damage your credit score. Instead, spread it out over 2-4 years to mitigate the negative effects of a hard inquiry.
Check your redemption offers
Many cards offer several ways to redeem your points. While straight cashback is probably the easiest option, some cards give you the ability to redeem for airline credits, gift cards, and more. But there’s a catch, these alternative rewards can sometimes stretch further because of the cards affiliation with the company it’s partnering with. For example, you might be able to receive $300 cashback for your year of spending. Or you might be able to use the same amount of points to receive a $325 gift card to one of your most visited stores for the same amount of points. This one is a no brainer! Now, don’t go redeeming your points for something you won’t use just because of its value. But always double-check to see if you can maximize your rewards alternatively to cashback.
Check for sign up bonuses
When looking for a new card, it’s important to consider the different sign-up bonuses available. Many shell over $150-$200 for spending $500 within the first three months of having the card. That’s a pretty sweet deal for not doing anything! Some cards offer even more. I received a $500 credit on my Capital One Savor card when I spent $3,000 in the first 3 months of owning the card. My trick, I knew that I would be purchasing a new computer during that time period so I didn’t have to overextend myself to receive the $500 statement credit.
Watch out for fees
Typically, we advise against signing up for a credit card that has an annual fee. However, some cards can be worth it. In fact, one of the cards with the highest annual fee, the AMEX Platinum card ($595 annual fee), is worth it for frequent travelers. You receive $200 per year in Uber credits, a $200 annual airline credit, access to Delta Skyclubs, and more. Add in the higher rewards rates, and it might be the right card for you.
Use your credit card as a debit card
When signing up for a credit card it can be easy to spend money that you don’t have. We advise against this, and if you can’t avoid the temptation, maybe a credit card isn’t right for you. You should always use your credit card as if it is a debit card. You should have the money you spend with it beforehand. You should not view your credit card as a “bill”. We view our credit cards as debit cards that come with rewards and we use them in that manner. Everything we buy gets put on a credit card and is ALWAYS paid off before the payment due date to keep our balances reported to the credit bureaus low.
These are a few ways to maximize your credit card rewards. What are your favorite techniques? Comment below!