Credit Sesame on maximizing card rewards and saving money.
Making the most of your credit card rewards shouldn’t require a complex spreadsheet and knowing every last detail in your card’s fine print of how its rewards program works.
With some basic knowledge and insight into how to get the most value from your credit cards, along with a few lesser-known perks that are worth aiming for, you should be able to maximize your credit card rewards and save money. And you won’t have to know any algebraic equations to get there.
Maximizing card rewards: cashback
Cash-back rewards are easy to understand and redeem. They’re earned at a flat rate such as 1.5% as you use your credit card for eligible purchases.
One of the best ways to accumulate them is if your card offers bonus categories, such as 3% back when buying groceries, 2% back on gas, and 1% on everything else you buy. If you have a large family and buy a lot of groceries, you may want to look for a credit card that has a high cash-back reward for grocery purchases.
Some cards change categories each month. This requires keeping on top of the changes so you can match your spending. If one of your credit cards offers 4% cash back on gas in July and another one drops it to 1%, then the 4% card is the obvious choice for buying gas during a summer vacation trip in your car.
Cash back rewards are usually paid in a statement credit each month or through cash that’s paid every few months by a deposit into your bank account.
Brand loyalty can extend to partners
Credit cards are often co-branded with specific airlines or hotels that cardholders can earn miles or hotel points for flights and rooms. If you’re loyal to one brand, then these rewards can be worth concentrating on.
But just because a credit card is tied to one airline doesn’t mean you can’t use its airline miles elsewhere. Airline travel cards usually partner with many airlines where credit card points are accepted. Go to the website of the card you’re considering and check which airlines it works with. Transferring your points to airline miles may get you more miles at certain partner airlines.
Find a great bonus
A welcome bonus for opening an account can give you enough travel miles for a roundtrip flight across the country or a large cash-back bonus that can help you pay for a big expense. From 100,000 bonus points or 6% cash back, many credit cards offer great bonus offers.
Most require charging a certain amount in a specified time to get the bonus, such as spending $3,000 within three months to get 50,000 reward points as a bonus offer. The higher your credit score, the more likely you are to receive the best offers.
Look for awesome travel perks
If you fly twice overseas at least twice a year, then a credit card that offers two or so free airport lounge visits each year and free Global Entry or TSA PreCheck can be worthwhile.
Just be sure to check that the annual credit card fee doesn’t pull too much value out of those perks. If you’re paying $500 for $300 worth of perks you’ll use, then check for other perks that you may use too.
Buy that furniture set with no APR for a year
Some credit cards offer 0% introductory APR for the first year, which is essentially an interest-free loan.
This can make a big purchase such as furniture for your living room more affordable, provided you pay off the balance before the free interest period ends. If you don’t, then interest charges from the day you bought it can accumulate and be due.
Use the travel portal
Some travel cards have a travel portal where points can be redeemed and are worth more than they are if used elsewhere. A 25% redemption increase is common in such portals, which are rewards programs set up through the credit card with its airline and hotel transfer partners.
A card’s travel portal may not have all of the flights and destinations you want but can be worth checking out if your card has one. And be sure to compare prices at airline websites to make sure you’re getting the most value for your points.
Look for entertainment bonuses
If a card offers a high cash-back reward for entertainment purchases, that may be enough to apply for it. But you should also look out for cards that offer discounted entertainment events for its card members. Rewards points can be used for some events, or cardmembers may get first crack at buying tickets with their card before they go on sale to the rest of us.
Events can include music festivals, concerts, live theater, high-end dining, and discounts on Marvel and Disney purchases or free Uber One memberships with $0 delivery fee on some Uber Eats orders and discounts on Uber rides.
Some cards that focus on entertainment spending give high cash-back rewards for movie tickets, TV, internet and streaming services. Some also allow cardholders to update their preferences every quarter, so you can change categories based on your needs.
Maximizing card rewards: Statement offers
Once you get a credit card, you are likely to receive get offers for discounts or freebies on your statements. The main requirement is that you sign up for them.
These rewards may seem like minor ways to save but can result in freebies or discounted 25% items. Statement credits or bonus points at select retailers are offered, usually for a few months.
For example, a TV streaming service that you were thinking of trying may be free for three months if you sign up for the offer and confirm it with your credit card. You get a statement credit each month you use the card to buy the streaming service for up to three months, and then the regular price is charged. Just remember to cancel the service before the free trial ends so you are not charged the full price in month four and beyond.
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Disclaimer: The article and information provided here is for informational purposes only and is not intended as a substitute for professional advice.