How to Take Advantage of Credit Card Rewards

Let’s face it: most people don’t think about their credit card rewards. They rack up charges, pay the bill, and move on. But if you’re not actively leveraging those rewards, you’re leaving money on the table. Earning rewards on your everyday spending can be a powerful way to save on travel, merchandise, and more.

This guide will walk you through how to maximize your credit card rewards and start seeing the real value of those points and miles.

1. Choose the Right Card(s)

Understand the Different Types: There are several types of rewards cards, each with its own benefits:
- Cash Back Cards: Offer a percentage back on all purchases. Generally the easiest to understand and use.
- Travel Cards: Offer points or miles redeemable for flights, hotels, and other travel expenses. Often come with perks like travel insurance.
- Store Cards: Offer rewards specifically for purchases at a particular retailer. Generally, these have the lowest rewards rates and higher interest rates, so proceed with caution.
Match Your Spending Habits: Don’t just pick the card with the highest headline rewards rate. Consider where you spend the most money. If you regularly buy groceries, a card offering bonus rewards on grocery purchases could be a better fit. If you're a frequent traveler, a travel card is likely your best bet.
Annual Fees: Many premium rewards cards have annual fees. Calculate whether the rewards earned outweigh the fee. Some cards offer benefits like lounge access that can save you money in the long run.

2. Maximize Your Earning Potential

Meet the Minimum Spending Requirements: Most cards have minimum spending requirements to unlock bonus rewards or higher earning rates. Track these requirements diligently.
Use Your Card for Everything: This is the key! Put all your spending on your rewards card. Don’t use cash or debit cards if your rewards card offers a better rate.
Bonus Category Spending: Take full advantage of bonus categories (e.g., 5% cash back on gas, 3% on restaurants). Plan your purchases to align with these categories.
Sign-Up Bonuses: These can be huge! Many cards offer substantial bonuses for spending a certain amount within a specific timeframe. Don’t miss out on these opportunities.
Rotating Categories: Some cards offer rotating bonus categories. Keep an eye on these and adjust your spending accordingly.

3. Tracking Your Rewards

Online Account: Monitor your rewards balance regularly through your card’s online account.
Rewards App: Many cards have mobile apps that provide real-time updates on your points/miles balance and offer insights into your spending.
Spreadsheet Tracking: If you prefer, you can manually track your rewards using a spreadsheet.

4. Redeeming Your Rewards

Understand Redemption Options: Different cards offer different redemption options:
- Cash Back: The simplest option - directly deposited into your account.
- Gift Cards: Redeem points for gift cards to popular retailers.
- Travel: Book flights, hotels, and rental cars directly through the card issuer or partner travel sites.
- Statement Credits: Use points to reduce your statement balance.
Compare Redemption Values: Don't just redeem for the most convenient option. Sometimes, one redemption option offers a better value than another.
Don't Let Points Expire: Most cards have expiration policies for unused rewards. Redeem your points before they expire!

Final Thoughts: Taking advantage of credit card rewards requires a little effort, but the potential savings are significant. By choosing the right card, maximizing your earning potential, and carefully redeeming your rewards, you can build a significant nest egg.