If you have recently signed up for a rewards credit card, then there is no doubt you want to be able to optimize its value. Typically, rewards credit cards fall into one of two categories – they either give you cash back or some sort of travel rewards. With such a large variety available to consumers nowadays, you can really decide what kind of reward appeals to you most.
Of course, the whole idea of using one of these rewards credit cards is that you earn points or cash, which means you need to know the tips to use that will help ensure you maximize its benefits.
Consider Applying for Multiple Rewards Cards
Depending on which reward(s) appeal to you, it can sometimes be beneficial to apply for multiple rewards cards. A study that was conducted in Consumer Report was able to show that if people made the right purchases, they could really rack up the savings. It went on to show that over a three-year time period, a family could net up to $5,000 in rewards thanks to these credit cards. The study focused on the popular cashback style of reward cards.
As for how many cards to get, that same study suggested that two credit cards was the ideal amount to have.
Learn How the Card Works
The first step is to make sure you understand how the reward points or cash back is accumulated. Do you get one point for every $10 you earn? Is it a percentage of your total bill? The answer will help you to figure out how to get the most points possible.
Can You Lose Rewards?
It's also important to look into whether or not rewards can ever be lost. Some situations that may result in lost rewards could be not spending the specified minimum amount, letting your rewards expire, the issuer changing the terms, or a late payment.
Shop at the Stores that Offer Maximum Benefits
Another thing to be aware of is the fact that not all stores are equal when it comes to awarding points. Some retailers may offer additional points that you can take advantage of, so it just makes more sense to shop there. Sometimes you can even double dip by earning extra points through that retailer’s own reward points/loyalty system.
Make Sure You are Using the Card
This one may seem like an obvious tip, but it’s important to use your credit card wherever possible. You can get into the habit of paying it off immediately so you don’t have to worry about running up a balance. Thanks to the ease of mobile banking, you can make a payment on your credit card any time of the day or night.
It’s a Process
While you may not earn huge cash rewards right away, as you start to learn the tricks and tips and how to best use your rewards credit card, you’ll see your balance start building faster and faster.