Any financial advisor will tell you that credit cards can be great financial tools for building a strong credit history. But to truly enjoy their benefits, you have to know how to maximize their rewards. Most credit cards come with perks that can stretch your budget, unlock exclusive deals, or even take your travel experience to the next level. Unfortunately, many cardholders miss the opportunity to earn and use them, resulting in lost extra savings that could help ease their monthly expenses.
If you’ve made this mistake with your first credit card, don’t worry. Here are a few tips that can help you optimize your new card’s rewards-earning potential.
1) Select the Right Credit Card
Although it’s tempting to apply for a credit card that offers flashy rewards, it’s much more sensible to choose a card that matches your spending habits. A card that fits your lifestyle can help you earn rewards more efficiently without forcing you to make any sweeping changes to your existing lifestyle.
To figure out which card suits your needs, it helps to evaluate how you allocate your monthly expenses. Once you know your spending patterns, you’ll be more confident in choosing a credit card that aligns with those habits and the type of benefits and rewards you can earn.
Are you someone who spends a lot on groceries and essentials? Then maybe a cashback credit card from Maya that’s focused on everyday purchases is a great choice, since it allows you to earn money back on items you buy regularly. Do you frequently travel for work or for leisure? If so, a travel credit card is a better option, as you can earn points that you can redeem for future trips or travel perks.
2) Ensure You’re Spending on the Right Categories
Certain credit cards come with bonus categories to boost a cardholder’s rewards-earning potential. While these categories can bring greater value to your spending, you need to keep in mind that not all categories earn the same rewards rate. The different reward rates are a strategy credit card issuers use to maximize customer spending and engagement. As such, taking note of these categories and planning your purchases strategically can help you earn the highest possible rewards from your regular expenses.
Take the Landers Cashback Everywhere Credit Card as an example. This Maya credit card gives you up to 5% cashback at Landers, 2% on dining spends, and 1% on all other qualified transactions. With this information, it makes sense to use this card when grocery shopping at Landers since it’s the category that gives you the most cashback points. However, this doesn’t mean the card should only be used in this situation. You can still use this credit card for dining, online shopping, and other regular purchases, allowing you to continue accumulating rewards across multiple spending areas.
3) Understand Your Credit Card’s Rewards Redemption Mechanics
Every credit card has its own rules for how points, miles, or cashback can be redeemed. Some allow instant use at checkout, while others require a minimum amount before redemption. Other programs offer better value when redeeming for travel or partner merchants instead of converting points to cashback.
That said, being familiar with your new card’s rewards redemption mechanics ensures that the points you earn translate into actual savings. To find this information, you can check your card’s online dashboard or mobile app. Reviewing your rewards breakdown regularly can also help you keep track of your available rewards, possible redemption channels, and any special offers that give you higher redemption value.
4) Spend Your Rewards Before They Expire
Unused rewards don’t always stay in your account forever. Points and cashback can expire if they remain unredeemed for too long, especially if the account stays inactive. In some cases, your points could change value when the card issuer makes an update to their rewards program. Therefore, you have to make sure that you spend most of your points before they expire to prevent them from going to waste.
An effective way to remind you to use your rewards points is by marking expiration dates on your personal calendar. It’s also a good idea to check your points regularly so that you never miss out on redemption opportunities that could help lower your expenses.
5) Pay Your Balance in Full Each Month
To continue enjoying the full value of the rewards you earn, keep your balance paid in full each month. Doing so prevents interest charges from reducing your savings and ensures your card remains in good standing. Meeting your financial obligations also enables you to use your points, as some card issuers may prevent you from redeeming your rewards if you have an outstanding balance.
Your Mindfulness Creates Real Value
Credit card rewards truly do provide valuable savings, but you have to know how to take advantage of their features to truly benefit from them. Maximizing your points-earning potential and redemption opportunities ensures that you get real financial value with every swipe. When you fully utilize your new credit card, you can enjoy more perks, stretch your budget further, and get greater returns from the purchases you already make.