How to Earn More Credit Card Rewards-5 Strategies to Implement Today
When it comes to credit card rewards points, there are two kinds of people—savers and redeemers. Some trade in their rewards points or spend their cash back as soon as possible, while others bank their rewards—saving for something in particular or just a rainy day.
But how can you earn more points or cash back to get to your goal faster? That requires two things—have a clear understanding of how each credit card works and employ a bit of strategy! Get started with these five tips:
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Review your budget and see what you can pay for with a credit card. One strategy is to put everything you can on your credit cards. The idea is that you have the money for these monthly, quarterly or yearly bills already accounted for in your budget. Use your credit card for everything possible and pay the bill in full each month with the money from your budget. Some online bill pay systems may charge a nominal fee to use your credit card—make sure you take these fees into account when deciding on this strategy. Add up any fees to better assess the value of your rewards points.
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Know which cards earn more rewards for certain categories. Some rewards credit cards earn rewards for every dollar you spend, no matter what. Some earn higher rewards on certain spending categories. It’s beneficial to know what those categories are so you can maximize your rewards.
For example, let’s say you have a credit card that earns one rewards point on any purchase and one card that earns three rewards points on gas. Make a note to always purchase your gas using the card that earns more points for that purchase. Same goes for travel, groceries, etc.
One more thing to note is that some rewards credit cards rotate the categories that earn higher rewards from month to month or quarter to quarter. That means a card may earn more rewards points for dining out one month and for gas the next. Make sure you understand how your cards work and know how to find this information as it changes.
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When shopping for a new rewards credit card, take into consideration your personal spending lifestyle. You may find an offer for a rewards credit card that only earns points on a limited number of spending categories—say, dining out and travel—but it’s got a signing bonus of 20,000 points. It may be easy to be lured in by those bonus points, but if you are someone who rarely eats out and doesn’t travel by air or stay in hotels very often, it doesn’t make much sense for your spending habits. You’d be better off finding a card that earns on everything or specific categories you utilize frequently.
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Set up automated payments and notifications. Most of us have automated payments set up on at least some of our bills—think streaming services, gym memberships and utility bills—but now is the time to revisit those auto payments and make sure they’re being paid with your rewards credit card and not your debit card. While you’re at it, take a look at any bills you pay by check or cash and consider using your rewards credit card instead.
Don’t forget to set up alerts and notifications on your account. Usually, you can set limits (For example: I want to be notified of every charge to my rewards credit card over $25) and choose whether you’d like your alerts and notifications to come via text or email. Account alerts can notify you of suspicious activity, let you know when you reach a low balance, see when deposits have cleared and more.
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Use shopping portals and dining clubs. Some rewards programs offer shopping portals—this is a website with access to a multitude of preferred vendors. Through these portals, anything you purchase with the preferred credit card can earn extra rewards points. Major airline credit cards often offer these shopping portals.
Some programs also offer dining clubs. Similar to the shopping portal, dining clubs are just a conglomeration of participating restaurants in your area that offer additional rewards points for using a specific credit card. It’s usually free to join so make sure you know what partnerships your card issuer offers, and take full advantage of them!
Keep an eye out for these budget thieves
Earning points or cash back on regular purchases and bills sounds like a great reason to use a rewards credit card. But this strategy doesn’t work for everyone. There are dangers that can eat away at your account balance—and you may not even see it happening!
The best way to combat these pitfalls? Be prepared and informed. Here are a few things to watch out for:
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Fees for using credit—As we mentioned in the first strategy above, some bill pay portals may charge you to use a credit card. Ideally, you want to use only sites that don’t charge a fee. But sometimes the convenience is worth a dollar or two to have automatic payments set up. Some merchants and payment services offer a discount on your bill if you either set up automatic payments or pay yearly instead of monthly. This is a good way to offset the credit card fee. Be sure you know the terms of the vendor you’re using.
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Annual fees—Are you negating the benefit of all those rewards you’ve earned throughout the year by just paying it all back in an annual fee? You’ll have to compare the cost vs. the reward on this one to decide. There are plenty of rewards credit cards that don’t charge an annual fee (or waive it for completing certain actions like completing a certain number of monthly transactions). If you’re in the market for one, add “no annual fee” to your search criteria.
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Budget mistakes—Putting most of your bills and purchases on a rewards credit card is not for everyone. It takes discipline and constant account management and maintenance. To be successful, make sure you’re only spending on planned purchases, track your spending and pay off your credit cards in full regularly.
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Increase in debt—It can be easy to overspend when you are using credit cards. Before you make a purchase, ask yourself if you have a payoff plan. If you don’t have one that works for your current budget, maybe you should rethink the purchase. When you start spending more for unnecessary purchases just to rack up rewards points, the end result is usually an unsustainable debt balance. If this is the case, stick to cash or debit instead.
How can a credit card help combat inflation?
Inflation continues to take a toll on Americans’ wallets. It’s difficult not to feel the pinch when the everyday necessities in your budget—like gas, food and housing—keep increasing in price. Now is when you need to make doubly sure you have the right tools in your financial toolkit.
Of course, you can combat inflation by cutting spending where you can and putting off non-essential purchases. Another way you may not have thought about is to use a rewards credit card. Whether you’re choosing cash back, gift cards or other rewards, it can help you shave a few cents per dollar off some of the items you need.
Mountain America Credit Union is proud to offer our Visa® Rewards credit card. Earn rewards on every purchase, redeem points easily and more—apply today!
