Credit card rewards programs offer many advantages, from discounts and cash back offers to discounts and loyalty bonuses. But it’s essential that cardholders understand how best to take advantage of them and maximize them for maximum benefit.
First and foremost, avoid carrying a balance, as the interest costs quickly outweigh any rewards gained from them. Next, take advantage of sign-up bonuses offered to new account holders.
Pay Your Balance in Full
Consumers love credit card rewards programs because of their attractive offerings of cash back or gifts for spending. But capitalizing on rewards cards requires careful planning and discipline.
One way to maximize credit card rewards is to pay your balance off in full each month – this way you’ll avoid incurring interest charges that could quickly eat away at your rewards points.
One way to maximize rewards is to select credit cards with superior rewards in each category of your spending, for instance if you spend extensively on groceries look for cards with more points earned in this area compared to others.
Many credit card rewards programs set caps on how much you can earn in each category, so it’s wise to monitor these closely in order to see if you are nearing or have reached them. This is especially important with cards with annual fees, in order to make sure that the rewards earned exceed any such costs.
Take Advantage of Welcome Bonuses
Many rewards credit cards offer generous signup bonuses of thousands of miles or points that can help you meet your travel goals, while providing a headstart on unlocking additional perks. It is essential, however, to understand what exactly this bonus entails before applying.
Before signing up for a new card, conduct thorough research on its rewards system and redemption possibilities – this can be found by going directly to its rewards portal.
Some cards require annual minimum spending to earn rewards, making it essential to track your spending progress in order to ascertain if a card is worthwhile keeping in your wallet and not overspending just to earn additional benefits.
Don’t Forget Recurring Bill Payments
When using a rewards card, it’s essential to remember that credit card companies will periodically bill you for purchases made. If your balance remains outstanding without being paid in full and on time, interest charges could eat away at or even wipe out any rewards earnings that have accrued to your card.
Some cards impose limits on how much you can earn in rotating bonus categories; others provide a flat cash-rewards rate regardless of what you buy. Points, miles or cash back credits also vary in value depending on which program offers higher redemption values for travel, merchandise or other products.
To maximize rewards, it may be beneficial to juggle multiple cards. Depending on your spending needs and goals, one card could be best used for general spending while the other might be best for online shopping or groceries; or combine cards from one issuer for bonus offers. Just be sure not to exceed your budget or credit limit! Remember also that IRS doesn’t consider credit card rebates income!
Look for a Card That’s Right for You
At the core, rewards credit cards do not compare. Your ideal card should match with your spending habits and offer benefits that matter most. Crowley advises taking time to carefully research all available options before making a final choice: minimum credit scores, annual fees and earning styles all play an integral part.
Tiered rewards programs offer bonus rates for specific categories like dining or travel. A co-branded airline card may be suitable if you frequently fly, while cash back rewards cards might provide greater convenience for someone who drives and shops for groceries.
Look out for cards with extra perks such as Global Entry or TSA Precheck application fee reimbursement; these perks help offset the costs of rewards cards while increasing their value and can maximize points or cash back earnings.