Smart Shopping: How to Get the Most Out of Your Credit Card Rewards and Points
Make it Rain (Points)
When used right, credit cards open a realm of new possibilities. Credit cards are not only a quick and convenient source of funds in case of emergency. They’re also quite useful for daily purchases, online shopping, tracking your spending, and establishing a good credit history. Last but not least, you can reap a lot of awesome benefits from credit card rewards programs. This article provides simple and practical tips on how to get the most out of your credit card points.
Pick a Suitable Credit Card
You get one step closer to becoming a credit card rewards master by choosing the right credit card. Not all credit cards are created equal, and finding the best one requires an assessment of the pros and cons of credit cards as well as your spending habits. Ask yourself, what products and services do you spend the most money on? What kinds of credit card rewards do you find most appealing?
For starters, you should look for cards that offer handsome sign-up bonuses and rewards programs that are tailored to your interests. If you travel a lot, opt for a card that offers rewards in the form of airline miles or hotel discounts. Do you prefer converting your points into “cash”? Find a card that offers a high cash-back percentage, especially for your most common purchases. Last but not least, do a quick security risk assessment of your prospective credit card issuer. You wouldn’t want to risk losing your money because of a credit card issuer’s vulnerabilities.
2. Know the Ins and Outs of the Rewards Program
Once you’ve found the ideal card for your needs, take time to read and understand the rewards program. Pay attention to the fine print, visit the credit card issuer’s website, and familiarize yourself with the rules and options for redemptions. Common reward options include miles, cash back, assorted merchandise, and gift cards. Note that other programs may have blackout dates, expiry dates for points, and other restrictions. So, it is crucial to learn all the rules before you decide on a card and before you start using it.
3. Take Advantage of the Welcome Bonus
Many credit card companies offer a sign-up bonus that can jumpstart your reward-earning journey. A newly opened credit card normally comes with a bonus ranging from $150 to $750.
But a welcome bonus requires a certain amount of spending. Often, you will be asked to spend anywhere from $500 to a few thousand dollars in the first three months in order to earn the bonus. So, a card company could give you a $200 cash bonus if you spend $500 with your credit card within three months from opening an account.
However, even if welcome bonuses can be lucrative, do not be tempted to spend beyond your limits just to earn it. The resulting interest that you’ll get from carrying a balance is not worth the extra rewards.
4. Optimize Your Spending
Having a strategic plan for spending can help you rack up more credit card points. A tried and tested strategy is to concentrate your credit card purchases on categories that offer the highest reward points such as groceries, dining, or gas. Some cards have rotating bonus categories that are modified every quarter. So, keep an eye out for those changes and adjust your credit card usage accordingly.
5. Pay On Time and In Full
Paying your balance in full and on time is vital to avoiding interest charges that can offset your hard-earned rewards. Missing your credit card bill can also lead to all sorts of legal and financial trouble. In the long run, failing to stay on top of your payments can deal a blow to your credit standing, especially now that credit score data is becoming more accessible for personal and institutional use. This can be disadvantageous should you need to take out a bank loan in the future.
6. Join Multiple Rewards Programs
Having multiple cards allows you to maximize your rewards-earning potential. Considering that different cards have different benefits and systems of awarding points, it’s a great idea to have more than one card. You could get one card that offers awesome travel rewards and another that gives you cash back for day-to-day purchases. Just be mindful of cut-off dates and bills. Manage your card payments properly to avoid unnecessary fees.
7. Don’t Miss Out On Bonus Offers
Most bonus offers from your credit card provider involve one-time discounts or special access to certain products or services. But providers also run limited promotions that give you extra points for signing up, buying specific products, or referring your friends. These promos can boost your rewards balance. To take advantage of this, set up alerts and notifications from your card issuer. You can also stay in the loop by following their social media pages, installing their app, and subscribing to their newsletter.
8. Leverage Online Shopping Portals
Due to its convenience and accessibility, online shopping has become the default option for many consumers. If you enjoy buying the hottest products on Amazon, make sure you’re leveraging the online shopping portals from your credit card provider. These portals let you earn additional rewards by starting your shopping journey from their custom website. So, before buying gifts for your partner online, check if your card has a designated portal for online shopping and then use it to shop from your trusted e-commerce retailers. It’s a quick and easy way to accumulate points.
Start Cashing In On Credit Card Rewards
Credit cards can be a powerful tool for earning rewards on your purchases. Just remember to use them properly and never to borrow more than you can pay.
Beyond that, you can maximize your credit card rewards by choosing the right card, earning your welcome bonus, spending strategically, and combining multiple rewards programs by having more than one card.
Knowledge is power, even when it comes to using credit cards. So, stay updated with bonus offers and always read the fine print before availing a credit card.
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