Rather than feel apprehensive about credit cards, it is healthier to look at them as the financial resource that they can be. Specifically, rewards credit cards can greatly offset any apprehensions a person may have regarding the downsides that can come with credit cards, such as interest, yearly fees, and a dwindling credit score. Having insight into how to make the most of credit card rewards makes it easier to ease anxiety and maximize one’s financial health.
Explore Different Credit Card Reward Options
Different credit cards offer different rewards. For instance, some offer airline miles while others provide cashback on select purchases. Consumers should opt for cards and rewards that align with their lifestyle; it doesn’t make much sense for a person who doesn’t travel a lot to have a card that offers discounts on plane tickets. For cards that offer cashback, it is a good idea to look over regular monthly spending to see if it makes sense to get a card that offers cashback on gas, department store purchases, or groceries.
Besides closely examining and considering specific rewards specific cards offer, learning more about how to accumulate rewards is a smart move. While a card could offer cashback in multiple spending categories, the cardholder may have to spend a specific amount within a specific time frame to take advantage of that reward.
Look Into Bonuses For Signing Up
Even though a credit card may not offer the best rewards, it could offer a great sign-up bonus that makes up for what the rewards lack. A cardholder may have to spend a specific amount within the first few months of opening an account, but using the credit card for qualifying purchases and immediately paying off the balance could even the scales with little to no risk to the cardholder’s credit score.
Spend a little time doing some research about the rewards programs you have to choose from. Even if you are in the process of building your credit, you still have some rewarding programs available to you. Credit Sesame has helped millions of consumers build their credit over the years and now they have developed Sesame Cash, which is a digital banking program with cash rewards for increasing your credit score. That’s a win-win situation! Take the time to compare available programs so you can find the one that is best for your current situation.
Consider Cutting Up Rewards Cards
Some people only have one or two credit cards while others have a generous spread. Those with multiple cards that offer multiple rewards may be better off trashing some cards. While spreading purchases across different cards may seem like a good idea, doing so could dilute the overall value of the cards. Additionally, having several cards means mentally juggling several rewards systems and potential annual fees.
Cards that are no longer worth keeping should be disposed of strategically. The number of credit card accounts a person has open at one time has a significant impact on that person’s overall credit score. Closing accounts at once, while a good idea, could knock a person’s score down several points. Slowly closing accounts over several months makes for an intelligent move. The same applies to using tools for managing credit, to make it easier to know when and which accounts to close.
Switch From A Debit Card To A Credit Card For Day-To-Day Purchases
Even if a person has money on hand for an everyday purchase, using a credit card instead of a debit card or cash maximizes rewards. This is a good way to avoid making more effort than necessary to fit in purchases that qualify for rewards. This is another instance in which the cardholder should prioritize paying off the balance ASAP, to enjoy the rewards without incurring interest fees.
Keep an Eye On The Expiration Date For Rewards
One reason to carefully consider the rewards various cards offer is to determine whether rewards points expire. Usually, rewards expire after 12 to 18 months. Even though it may be possible to buy back lost rewards programs, this can be more trouble than it’s worth. Timing is everything when it comes to credit cards, both in regard to paying them off and using their rewards.
Utilize Shopping Portals
Popular retailers and major credit card companies pair up to create online shopping portals to make it easier for cardholders to earn rewards. The way it works is consumers use the credit card company’s portal to access the retailer’s site, as opposed to using a search engine to access the company’s site. While this method may prove to be a bit of a time-consuming hassle, it could be a great way to maximize rewards. Something else to think about is that using a credit card to make online purchases is often more secure than using a debit card. Because the money on a credit card does not actually belong to the cardholder, it’s easier to dispute fraudulent charges.
Monitor Changing Terms
Just because a credit card doesn’t come with an annual fee when a person first signs up for a card does not mean it will stay that way. While credit card companies are legally required to inform consumers about changes to their terms, they do not have to make it easy to find those changing terms in their correspondence. By carefully scanning a notice, especially the fine print, cardholders know when they can expect a lower cashback percentage or fewer airline points or miles.
On a related note, cardholders should carefully look over the terms of a credit card before initially signing up for one. The fine print lets a person know whether she or he has to voluntarily opt into regularly rotating categories to make the most of a generous rewards rate. Credit card terms may also inform a person whether there is a cap on how much she or he can earn on bonus rewards and whether that limit is monthly or quarterly. There may even be specific retailers a credit card company excludes from its rewards program, a retailer that a cardholder frequents.
Getting the most use out of credit card rewards is all about having a well-informed strategy and keeping up-to-date on the card’s terms. While both may require a bit of work, the financial reward (as well as the credit card’s rewards) is often well worth it.