Credit card rewards are a popular topic in the personal finance world. Most people are familiar with the concept behind rewards, but there are many more nuances to the system than most realize. This article will dive closely into the basics and give you a primer on how things work.
Switch to A New Credit Card
If you switch credit card companies and apply for a new credit card, you could get miles, cashback, or points for charging expenses to the card. Plus, you could earn a sign-up bonus.
Avoid Annual Fees
Before applying for a rewards credit card, it’s a good idea to try it out. Take advantage of an issuer that doesn’t charge an annual fee in the first year. This way, you can try out the service and make sure you like everything from customer service to ease of rewards redemption.
Wait for Promotional Offers
When new credit card offers are released, issuers often have special promotional welcome bonus offers. Sometimes these bonuses aren’t advertised on the company’s website or elsewhere to the general public, but they can be found through credit card comparison sites, travel reward blogs, and Google search.
Find out The Categories
Many reward credit cards offer bonus rewards on groceries and gas, but here’s a way to hack the system and earn extra rewards in even more categories. Just buy gift cards to your favorite stores with your credit card at the grocery store or gas station. You’ll be earning bonus rewards or cashback when you buy from these places—and then you’ll be able to spend your gift card anywhere.
Use Multiple Credit Cards
To take advantage of credit card rewards, use multiple cards with different bonus categories, so you get rewards on all your spending. For example, use one card for 5% back on gas and groceries, another for 3% back at restaurants, another for 3% at the pharmacy, and yet another card for 2% cashback everywhere else.
Know the Rules
A card’s category can change on a monthly or even quarterly basis, depending on the rules. This can make the card less valuable if you’re not willing to stay on top of the category changes and readjust your strategy accordingly.
