Today’s post is sponsored by our friends at Credit Sesame. Credit Sesame is an educational credit and personal finance website that provides consumers with a free credit score, free credit monitoring, and free identity theft protection.
Credit card rewards can seem too good to be true.
You earn travel rewards and cash back just for spending.
How can card issuers afford this? One reason is because most people are completely ineffective at using their cards and don’t come anywhere close to maxing out their potential. Don’t be one of them.
Here are a few simple strategies you can start using right now to turbocharge your credit card rewards.
Pick the Right Program and Use It
You have countless options for reward cards and more come out every day. The program you pick should offer rewards that you actually want and will use. Many people go on auto-pilot and just keep using the same card even if they don’t really use or like the rewards. If you aren’t sure what programs are available, compare the latest offerings and find your best match on the Credit Sesame credit card marketplace.
Once you take out a rewards card, use it every time you can because even small purchases add up. You can’t earn rewards if your card sits at home.
Don’t Limit Yourself to One Card
You do not have to limit yourself to one reward card. Using a few different programs earns a mix of rewards that can be more useful. Travelers can use one card to earn free flights and another to earn hotel stays so an entire trip is covered.
Some cards offer extra points in special spending categories. For example, one might pay triple points for gas purchases while another pays extra points for groceries. With a mix of cards, you can line up your spending each time with the best offer.
Applying for a new credit card usually lowers your credit score by a couple of points because of the new credit inquiry. However, in the long run an extra card can help you reach a higher score because it increases the your overall available credit (provided you don’t maintain high balances on multiple cards). If you’re worried about your credit score, you can check your free credit report card online to see whether you are in a good position to take out a new card.
Compare the Different Ways to Use Your Points
Some reward cards give you a variety of ways to redeem your rewards. For example, with Chase Sapphire Preferred®, you can redeem your points for a statement credit against your purchases, transfer the points to a participating hotel/airline program, or spend the points for travel through the Chase Ultimate Rewards® travel portal.
The travel portal often works out to be the best deal because Chase gives a 20% discount off the price when points are redeemed. In other words, you can redeem 40,000 points for either a $400 statement credit or to pay for a $500 flight. It’s easy to overlook perks like this if you don’t understand all the features behind your card.
Signup bonuses are one of the best ways to earn rewards quickly. However, to qualify you usually need to spend a certain amount on your card within the first few months. This spending threshold can be a few thousand dollars for larger bonuses. If you can’t reach the threshold, you’ve lost your chance to receive the signup bonus. Before signing up, review your planned spending during the signup period. Don’t make extra purchases just to get points, especially if you can’t pay off the balance when the bill comes.
Some cards also offer a higher bonus rate on spending in special categories if you first sign up for the bonus rate. If you forget to sign up, you will not earn the extra points. Give yourself a reminder every quarter so you don’t miss out.
Watch out for Expirations and Missed Payments
If you’re going to put in the work to earn rewards, don’t let that effort go to waste. Some rewards expire, so if you don’t redeem them quickly, they’re gone. Others forfeit your earned rewards for the month if you are late on your monthly minimum payment. To avoid these pitfalls, check your card terms and always pay your monthly bill on-time.
Enjoy your rewards. You’ve earned them.
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