How to get the most out of your rewards credit cards
If you're thinking about opening a new rewards credit card, you may be having a hard time figuring out which card will match your wants and needs, especially since so many major credit cards offer top-notch rewards.
Whether you're a new credit card holder or you've been using multiple cards for years, you'll want to be sure to maximize the benefits offered by your rewards credit cards. We've detailed three simple ways to ensure you're getting the most from your rewards credit cards.
Choose the right card for your needs
One of the easiest ways you can get the most back from your credit card is to choose one that aligns with your spending habits and interests.
For example, if you commute for work or you take the kids to school, soccer practice and other extracurricular activities, a credit card that gives you cash back on gas purchases may be best for you because you'll be earning rewards on purchases you're already planning to make. Similarly, if you're a big foodie who enjoys trying out new, trendy restaurants, you'll want a credit card that gives you rewards for dining out.
No matter where your interests lie, there's a card for you. To help you get started on the right foot, here's some of the top options for cash back and travel rewards credit cards.
Best credit cards for various needs:
Best cash back credit cards
Blue Cash Preferred Card from American Express If you frequent the grocery store, gas station or department stores, the Blue Cash Preferred Card from American Express (a NextAdvisor advertiser) is for you.
This card gives you 6% cash back at U.S. supermarkets (on up to $6,000/year, then it's 1%), 3% cash back on gas and select department store purchases, such as Kohl's, Macy's and Nordstrom, and 1% cash back on all other purchases. American Express also has a special offer that gets you 5% cash back on travel purchases in the first 6 months (on up to $4,000 in purchases, then it's 1%).
Cardholders will also enjoy a 0% intro APR for 12 months on both purchases and balance transfers (with a 3% balance transfer fee). Plus, when you spend $1,000 in the first 3 months, you'll receive a $150 bonus! Although there is a $95 annual fee associated with this credit card, it may be worth the fee if you use the card for all of your grocery, gas and department store purchases.
That said, if you're looking for a card with no annual fee, its sister card, the Blue Cash Everyday Card from American Express, offers similar cash back rewards, the same 5% bonus offer, a $100 intro bonus as well as a 0% intro APR for 12 months on purchases and balance transfers (with a 3% balance transfer fee). Chase Freedom - $150 Bonus Chase Freedom - $150 Bonus is another one of our top-rated cash back credit cards. It earns you 5% cash back on combined purchases in rotating categories (on up to $1,500/quarter, then it's 1%) as well as 1% cash back on any other purchases.
While it may not be best for all of your regular purchases because the categories rotate on a quarterly basis, it's still a top-notch cash back credit card because its rewards usually match seasonal purchases you'll likely make throughout the year. For example, it earned 5% cash back at restaurants and wholesale clubs from July through September, and it earns 5% back at department stores, wholesale clubs and drug stores from October through December.
It's important to note that you'll need to sign up for the rotating categories each quarter, but Chase will send you text or email reminders so you don't forget. As an added bonus, after you spend $500 in the first 3 months, you can earn a $150 bonus! There's no annual fee with Chase Freedom - $150 Bonus and cardholders can look forward to a generous 15-month 0% intro APR period on purchases and balance transfers (with a 5% balance transfer fee).
If you're looking for a card with the same intro bonus that earns you a flat rate on every purchase, check out Chase Freedom Unlimited, which earns you 1.5% cash back on all purchases. Discover it - Cashback Match Another card that offers cash back on rotating categories, but is available to those with not-so-perfect credit is Discover it - Cashback Match.
This card earns you 5% cash back on purchases in select categories -- from October through December you'll get 5% at Amazon.com, department stores and Sam's Club -- (up to $1,500/quarter, then it's 1%) as well as 1% cash back on all other purchases. Plus, at the end of your first year as a card member (note it's not calendar years), Discover will match all of the cash back you've earned. This means if you've earned $500, Discover will match that and you'll receive $1,000! Discover it - Cashback Match also offers a generous 12-month 0% intro APR period on purchases and balance transfers (with a 3% balance transfer fee) and you'll never have to pay an annual feel with this credit card.
Those looking for a similar card that earns travel rewards will want to check out Discover it Miles, which earns a flat 1.5 miles per $1 spent on all purchases, has the same Discover match feature and more. Visit our cash back credit card reviews to learn more about these cards and other top options.
Best travel rewards credit cards
Chase Sapphire Preferred Card Holding the No. 1 spot in our Travel Rewards Credit Card Analysis for its outstanding hotel and flight redemption value of $2.19 per $100 spent is the Chase Sapphire Preferred Card. To start, this credit card earns an unlimited 2 points for every $1 spent on travel and dining, plus 1 point for every $1 spent on any other purchases.
Next, after you spend $4,000 in the first 3 months from account opening, you'll earn 50,000 bonus points -- that's worth $625 toward travel when you redeem through Chase Ultimate Rewards! One major perk of the card is its points flexibility, as you have the option to transfer your points to another leading airline or hotel loyalty program at a 1:1 ratio for free.
This means 100,000 Chase points equal 100,000 airline or hotel points/miles. On the other hand, if you decide to redeem your rewards for airfare, hotels, car rentals or cruises through Chase Ultimate Rewards, you'll get 25% more value. Something to note about the Chase Sapphire Preferred Card is its annual fee of $95, which is waived for the first year.
Cardholders who frequently travel overseas can rest easy knowing that this card has no foreign transaction fees and includes some travel protection, like travel accident insurance and lost luggage reimbursement. Barclaycard Arrival Plus World Elite MasterCard The Barclaycard Arrival Plus World Elite MasterCard is another option if you're looking for a card with some great travel rewards on every purchase you make. That's because this card earns an unlimited 2 miles for every $1 spent on all purchases, which makes things easy because there's no need to worry about using your card for specific purchases.
You also have the option to earn even more miles, as this card gives you 5% of your miles back toward your next redemption every time you redeem your miles -- for example, when you redeem 100,000 miles, 5,000 miles will be deposited into your rewards account. And when you spend $3,000 in the first 90 days, you'll earn 50,000 bonus miles -- that's enough to redeem for a $500 travel statement credit! Rounding out the card are no foreign transaction fees, a 12-month 0% intro APR on balance transfers made within 45 days of account opening and an $89 annual fee that's waived your first year.
Capital One Venture Rewards Credit Card Another top-option for travel rewards is the Capital One Venture Rewards Credit Card. It earns an unlimited 2 miles for every $1 you spend on every purchase, plus, you'll get 40,000 bonus miles -- that's worth $400 in travel -- when you spend $3,000 within 3 months of approval! The $59 annual fee is waived for the first year, you won't have to pay any foreign transaction fees when you travel overseas and the card comes with extended warranty protection. Check out our travel rewards credit card reviews to see a side-by-side comparison of these cards and learn about some of the other top names in travel rewards.
Read the terms and conditions
Equally as important as choosing the right rewards credit card for your needs is to understand how those rewards programs work. You'll want to be sure you read the full terms and conditions associated with the card you're applying for or own to know how your rewards are earned and how to redeem your earned rewards. This will clearly explain everything you need to know. After all, the cash back rewards or points you've accrued won't do you any good if they expire before you can redeem them.
Some credit cards, like the BankAmericard Cash Rewards Credit Card or Chase Freedom Unlimited, for example, have no expiration dates for their rewards as long as the card remains open, while rewards earned with cards like the Citi Double Cash Card - 18 month BT offer will expire if you haven't earned any cash back for purchases or payments in 12 months.
Although most cards will likely have terms that match the former, it's important to look into this, as you don't want to be surprised when your rewards disappear one day. You should also be aware of when and how you can redeem your rewards.
If you want some flexibility when you redeem your rewards, you'll want to select a card that allows you redeem them the way you choose. Similarly, you'll want to be aware of the minimum rewards required for redemption, as those looking for the ability to redeem when they want will not want a card like the Costco Anywhere Visa Card by Citi that only lets you redeem your rewards as an annual reward coupon in your February billing statement.
Another noteworthy detail to pay attention to in the terms and conditions is whether or not your credit card can help you with warranties on larger purchases (e.g., televisions, dishwashers or other home appliances). Some merchants will offer you an extended warranty if you pay for your purchases with a particular branded credit card, so you can avoid paying out of pocket for an extra year on a warranty.
It should be noted that if anything in the terms and conditions is unclear, you can always call the card issuer to ask for clarification.
Pay your bill on time
In order to get the most from your credit cards, you'll want to avoid racking up any extra costs. You can do this by paying your bill on time, which helps you avoid paying late fees and penalty APRs.
If you fail to pay your bill on time, you could also be at risk of losing the card's rewards, as some credit card issuers will put a halt on your earnings while you have an outstanding bill, or worse, you could completely lose the rewards you've already earned.
What's even more detrimental to missing payments is that your credit scores could take a hit if you repeatedly fail to pay your bill on time. This is why it's extremely important to make sure you use your card responsibility, and only make purchases that you know you can afford to pay down. It should be noted that if you find yourself carrying a balance on a high-interest credit card, you may want to consider completing a balance transfer.
While you will likely have to pay a balance transfer fee -- unless you opt for a card with a $0 intro balance transfer fee like Chase Slate -- this one-time fee is likely a lot cheaper than the interest you're currently paying on your credit card. Another thing to remember is if you're having trouble making your payments because of the due date, you can always reach out to your credit card issuer and request to have your due date moved to a different day of the month.
Follow our credit cards blog to learn more about anything and everything related to credit cards, and visit our credit card reviews to see the top cash back, travel rewards, balance transfer credit cards. Disclaimer: This content is not provided or commissioned by the credit card issuer.
Opinions expressed here are author's alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This content was accurate at the time of this post, but card terms and conditions may change at any time. This site may be compensated through the credit card issuer Affiliate Program.
The post How to Get the Most Out of Your Rewards Credit Cards appeared first on NextAdvisor Blog.