3 Ways to Maximize Your Credit Card Rewards

Picking a credit card can be a challenge — there’s interest, APR, fees, cash back, points and rewards to consider. You want to get the right choice for you. If you plan to use your credit card for everyday spending while also paying off the bill in full each month, a rewards credit card might be a good option for you. Rewards credit cards can offer the convenience of a standard credit card with the potential for some major travel, merchandise, gift card and cash benefits, though they tend to carry a higher interest rate and possibly an annual fee.

The more strategically you use your rewards credit card, the bigger the payoff will be. So before you pull out the plastic, check out these three tips to help stretch your credit card rewards.

1. Pick a Card That Matches Your Style

When you are choosing a rewards card, it’s a good idea to find one that will do two things — help you earn things you want to use and reward you for how you already spend. The offered rewards should align with your interests and goals. If you are hoping to go on a trip soon, an airline miles rewards card (here’s a list of the Best Airline Miles Rewards Cards in America) may be the way to go. This also works the other way — some cards offer more points based on what you buy. If you commute to work, you may choose a card that gives extra points when you fill up the gas tank whereas if you eat out often, you may want a card that gives you more dining points. Just don’t pick one you aren’t likely to use or benefit from — look for a card that works with your spending style.

2. Know the Rules & Fine Print

Earning rewards won’t do you any good if you don’t know how to use them or what you can use them for. It’s important to understand the details of your rewards credit card before you put it to work. Be sure to meet the minimum if your card has one and know when your points or rewards expire, if they can be transferred or traded and if there is a limit on the amount of rewards you can earn. It’s also a good idea to check in periodically with your card in case of changing terms. You’ll also want to know both your credit standing (you can see a free credit report summary, updated every 14 days, on Credit.com) and the credit standing required for the card before you apply, because every application can cause a small, temporary drop in your score.

3. Spend As Usual & Redeem

While I am wary to recommend this, you do have to spend to earn those rewards. Once again, this is best for a person who adheres to a budget, avoids overspending and pays credit card bills in full every month. If this is you, then you may want to use your credit card whenever you can (for planned expenses) and look into any possibilities of earning extra points (like double points at the grocery store for particular months). Once you have begun racking up the points, be sure you redeem your rewards wisely. Some cards limit how you can redeem, while some provide more flexibility. You may be able to choose whether you want to use points for travel, shopping, gift cards or a statement credit. Look at which options give you the biggest bang for your buck before you make a decision.

Just remember to use your credit card responsibly and avoid racking up credit card debt so you can get the most out of rewards without overspending.