If you only want to get cash back from your credit cards and believe that it is the best reward option for you, then think again!
It is all about your preferences. You should opt for the best reward cards after verifying all the benefits, and as per your choices. This is the most common way to get credit card benefits.
To get the best out of credit card rewards, you need to follow multiple steps. A good credit card will give you rewards for making payments on various things, such as traveling, dining at an expensive restaurant, or shopping. Starting from the cash back, you might be offered discounts, reward points, free travel points, and lots of other benefits from a reward credit card.
To make sure that you don’t miss out on the best rewards, here is a list of ways to get the best reward out of your credit cards.
1. Choose the right credit card
Practically, there’s no best reward credit cards out there. Every consumer has his/her own choices for benefits. The best cards you may choose after considering your spending habits, your personal preferences, and your credit score.
a. Spending habits
If you have a big family and spend a lot each month on gas, phone bills, and groceries, it might be a good idea to grab a reward credit card like the Bank of America® Cash Rewards credit card. This card may offer you bonus rewards on your heavy purchases.
On the other hand, you won’t need that card if you are a single person with a low grocery bill, and do not shop much, or don’t have a car.
b. Personal preferences
You may need to make big decisions by considering your own preferences. While choosing between travel rewards or cash back rewards, if you select travel rewards, then you’ll again need to decide if you want a general travel card or an airline or hotel card. This is one of the easiest ways to get the best reward out of your credit cards.
You’ll also need to decide whether you want flat-rate rewards or the option to earn bonus rewards.
c. Credit score
You can not achieve all credit card rewards in a single card. Different credit cards have different rewards or benefits. You must have a good or excellent credit score to get the most out of your reward credit cards.
Normally, a 700 credit score is enough to get most of the rewards credit cards.
If possible, you should use two or three rewards credit cards to get the benefits of their different rewards programs.
For example, you may select the Chase Sapphire Preferred® Card while doing travel purchases, the Discover it® Cash Back card to get the benefit of its cash back program, and the Wells Fargo Cash Wise Visa® Card for other purposes.
2. Use your credit cards for making payments
To get the best out of your credit card rewards, The more you use your credit cards, the easier it will be to earn maximum rewards. It’s like a push to use your credit card instead of cash or a debit card whenever it is possible to you.
But remember it doesn’t recommend impulse buying or overspending.
Look for the options in which you can use your credit cards instead of using another payment mode. But if your credit card company charges a fee to use the card, calculate to see if you’re paying more in fees than you’d earn enough credit card rewards.
If the fees are higher than the rewards, it’s not worth it.
3. Find out what doesn’t earn you rewards
It’s easy to use your credit card for every purchase you are making. But don’t use your card in such items which don’t give you any rewards at all. For most credit cards, this includes cash advances and balance transfers.
Both of these financial activities may require fees. You won’t have any grace period with cash advances, so interest will start accruing immediately.
4. Pay off your due balances in full
Paying interest for your rewards credit card will be the worst thing you can imagine. It will lower the benefit value you get from the card, or even make it nil.
If you want to avoid carrying a balance on the best rewards credit cards, you should follow a proper budget, and pay off your credit card bills entirely each month.
5. Redeem your credit card rewards properly
You have the best rewards credit cards in your wallet, but you think that the best redemption option is only cash. This is wrong. For example, the Discover it® Cash Back offers a $5 as a bonus if you use your rewards to get gift cards on over 100 brands.
If you earn travel rewards on your credit card, you’ll have the opportunity to maximize the rewards.
If it’s a general travel card, you can find the cheapest hotels and flights for your trip. And if it’s a hotel or airline card, you can book your trip when your points or miles may give you the most benefit.
There are multiple ways to get the best reward out of your credit cards. But it will require some hard work and common sense to get the most out of your credit cards. If you do your math and use your credit card rewards properly, you may earn hundreds of dollars or worth rewards every year.