It isn't enough to have a rewards credit card, you need to understand ways to maximize credit card rewards. These cards are an excellent way to save on future purchases. For every dollar you spend, you might be eligible to earn cash, miles or points. It's an amazing cardmember perk - if you know how to play the game. Here's a rundown of seven simple ways to maximize credit card rewards.
1. Pick the Right Card
Picking the right card is one of the best ways to maximize credit card rewards. Don't choose a random card, pick one that's suitable to your lifestyle. For example, if you're a frequent flyer, you need a credit card that lets you earn miles towards future travel. However, if you prefer receiving a check in the mail, a credit card with a cashback option might be a better fit for your wallet.
2. Check the Rate and Annual Fees
When choosing a credit card with a rewards program, make sure you pay attention to the interest rate and annual fee. Annual fees are common with some reward credit cards, but it's possible to find one that doesn't charge this fee. Some reward credit cards also offer introductory rates, such as 0% interest for up to 18 months. Apply for these cards if you're looking to save on interest or transfer a balance.
3. Understand Bonus Opportunities
Several credit cards that feature reward programs offer bonus opportunities. These vary by card. For example, if you spend $1,000 on a card within the first 90 days, you might be eligible for 20,000 bonus points. Therefore, make sure you read the fine print and fully understand the perks available to you.
4. Know the Promotions
In addition to bonus opportunities to earn points, some credit cards with reward programs have promotions. Although the credit card may give one point for every dollar you spend, some credit cards offer two points for every dollar you spend on eligible purchases. Additionally, some cards offer 1% cashback bonus on every purchase, and up to 5% cashback on select categories, such as dining and gas.
5. Use the Card for Everyday Purchases
If you really want to maximize your credit card rewards, you need to use the card as often as possible. You might use the card when buying groceries, gas, dining out or paying your bills. You'll accumulate points or miles faster, which puts you closer to redeeming a reward.
6. Don't Carry a Balance
And since you're using your credit card for everyday purchases, it's important that you don't carry a balance. Only use your credit card if you can afford a purchase, and if you know for certain that you'll have money to pay off the card at the end of the month. If not, you run the risk of accumulating debt.
7. Know the Rules
Also, it's important that you're familiar with the rules associated with a credit card rewards program. For example, some travel reward credit cards have blackout dates, or certain times of the year that you're unable to redeem points for a flight. In addition, some credit card reward points or miles expire, although many credit cards now offer rewards with no expiration dates.
Using a credit card with a rewards program is one of the best ways to enhance your credit card experience and take advantage of cardmember perks. But you need to know the rules and understand the best ways to manage your card. What are other ways to maximize credit card rewards?