Six Credit Card Rewards Tips to Maximize Your Points

May 14, 2010

How you earn and redeem credit card rewards points can make a big difference on how much money your cash back or travel rewards program can end up putting in your pocket.  Like any other tool, even the best rewards credit cards won’t give you the ideal results if not used properly. Here are some things to keep in mind when earning and redeeming rewards points.

Watch for Rewards Promotions

Chase is running a promotion this summer where certain cards earn you 10 points for each dollar you spend on qualified categories.  As I mentioned when covering this Chase Sapphire bonus, this effectively amounts to 10% cashback for a few months, which is a really good offer.

Keep an eye on your mailbox and your email for similar promotions.  Sometimes credit card companies announce these with a flyer in your bill envelope and other times it’s a separate mailing specifically for the promotion.  In my case I got something in the mail and an email about it as well.

Earn Seasonal Cashback

Cards like Discover pay different rewards rates for certain categories during different times of the year.  If you have more than one rewards card, make sure you’re aware if any of them offer different rates during different seasons.

For example, during the first quarter of this year you could have earned 5% cashback on travel related spending through Discover .  So if you were travelling for Spring Break, that might have been the best card to use for the highest rewards.

For the second quarter, the promotion switches to home and fashion so if you’re doing house projects this summer and choosing between Discover and another card in your wallet when checking out at Home Depot or Lowes, your highest cashback option might be the Discover card.

Pay Your Credit Card Bill on Time

I was reminded of this this today as I looked over my bill for my American Express Blue Cash card and saw that my rewards payout is coming up this month.  I also noticed the following note:

“Remember to pay at least the minimum due, by the payment due date, to avoid cash rebate forfeiture.”

Of course you want to avoid late payments so you’re not hit with fees and interest, but you also want to avoid losing any rewards points that you’ve earned.  One thing I do to make sure I don’t have to worry about this is schedule my payment to go out a few days early.  That way in case there is any problem with my payment I still have time to handle it and not have to worry about losing rewards points.

Check the policies of your rewards card and see what their policies are how late or missed payments effect your rewards.

Know the Rewards Tiers

Most rewards program have specific rules about the points or cashback you earn based on how much, or how little, you spend in certain areas.

For example, some cards pay a lower cash back percentage for each dollar until you’ve spent a minimum amount of money.  At that point your cashback percentage bumps up to a higer tier and you earn more money.  Knowing which spending tier you’re in can help you choose your card that will earn you the most.

Other cards cap the amount you can earn in a certain category during a given time frame. If you’ve already earned the maximum amount for a category, you’ll want to use a different rewards card until that time period has ended.

Be Smart About Redeeming Rewards Points

Depending on the program there are various ways to reedem your rewards points, such as:

  • Turn them in for cash or gift cards
  • Earn a statement credit
  • Apply rewards towards a purchase

How far your money goes may depend on how you use your points, you may get more bang for your buck by getting a gift card then requesting the cash back.  However, when evaluating your options, keep in mind the reason you signed up for the reward card in the first place.

For example, when I opened our AmEx blue cash card, my goal was to earn cashback so I use it just to help us take a bite out of our bills.  I periodically get offers in the mail suggesting other ways I could use the rewards I’m accumulating but I stick to my plan.

Another thing to keep in mind, if your cash back is applied as a statement credit, rather than you getting a check, don’t be tempted to spend more that month simply because you’re getting your reward. 

Get Your Rewards!

Cards like Chase Freedom and Chase Sapphire let you log into your account and decide how you’ll use your points.  The choices you have through their Ultimate Rewards program are nice but it also means you don’t get your money or rewards until you ask for it.

Keep an eye on how your points are accumulating. When you have enough points, login and redeem them!


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Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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3 Responses to Six Credit Card Rewards Tips to Maximize Your Points

  • parag

    Redeeming credit card reward points is a great idea instead of dipping into your savings or going into credit card debt. Thanks for those helpful tips because I am using credit card only since past few months.


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