How to Maximize Credit Card Rewards
Obtaining credit card rewards can be very satisfying, but how do you get the most bang for your buck? We reached out to three credit card experts to get some answers. Gerri Detweiler, head of market education for Nav; Kali Geldis, editorial director of Credit.com, and Beverly Harzog, credit expert and author of The Debt Escape Plan, weighed in.
Also stay tuned for future articles on how you can keep more cash in your pocket through savvy management of credit card rewards. We’ll give you the lowdown on choosing the best rewards programs.
Choose the right rewards program
You won’t gain the maximum benefit if you choose a card that is not a good match. For example, if you don’t travel much, you may not benefit from a travel rewards card. Review the type of program you participate in to see if it makes sense to continue.
“Take a look at two things: where you use your card, and how you use rewards. If you’re piling on lots of travel miles but you don’t travel much anymore, you may be better off with a card that earns you cash back. Everyone can use cash! Or if you have a large family and spend a lot on groceries, a card that earns you 6% back on those purchases is a deal. Blue Cash Preferred from American Express, for example, features 6% cash back on the first $6,000 spent in grocery stores,” said Detweiler.
Pay your balance in full each month
If you want to avoid interest charges gobbling up your rewards, Geldis says you’ll want to pay your balance off each and every month. This way, you’ll actually be able to benefit from the rewards points:
“Pay your balance in full every month so interest charges don’t eat away at your rewards. Plus, some cards will give you bonus rewards for paying off your bill, like the Citi Double Cash Card. Make sure you sign up for any rotating rewards categories — some rewards credit cards have quarterly bonus 5% cash-back categories, but you have to activate those categories.”
Keep track of points
It can be easy to lose track of how much you have earned and end up not using your points at all. Harzog recommends keeping a close eye on how many rewards you have accumulated:
“Make sure you know how much you earn per category, if that applies, and if there are any caps on the amounts you can earn. If you have several rewards cards, find a way to keep track of your rewards so you don’t forget to use them. You can use online rewards tracking websites or just set up your own old-fashioned Excel spreadsheet.”
Review the cards you use
Don’t get too comfortable with the rewards program you participate in. There may come a time when the rewards don’t give you what you need. Always do a regular review of the benefits to make sure the program is a good fit for you and your purchasing style.
“[Review] the cards you use periodically to make sure you are getting the biggest bang for your spend,” Detweiler said. “In other words, the card that was a great deal when you got it may not be the best one for you now. I recommend an annual review. It may be that another card in your wallet would be a better option, or you may want to apply for a card with a more lucrative program.”
Look for bonus rewards in rotating categories
If your card offers bonus rewards, do your best to take advantage of this perk. Use your card for all it’s worth and don’t leave any benefits on the table.
“If you have a card that provides bonus rewards for rotating categories, take advantage of those when it makes sense. For example, Chase Freedom, a popular reward card, offers 5% cash back in rotating categories that change each quarter. And some cards offer online deals or “shopping malls” where you can earn even larger rewards. Examples include Chase Ultimate Rewards, Citi Bonus Cash Center, Discover Deals,” Detweiler said.
Divide and conquer
This strategy builds on Detweiler’s advice to use bonus rewards for rotating categories. If you have more than one rewards credit card, it involves utilizing the credit card rewards calendar for each card so that you can benefit from cash back throughout the year from each card in different categories. For example, Chase Freedom and Discover It both feature rotating 5% cash back during the year. You can access the Chase rewards calendar here and Discover here.