We all love a good reward.
A rewards credit card is any card that offers you some kind of bonus, whether it be cashback, travel miles, or points towards a free gift. If you figure out a good credit card rewards strategy, you may be able to use these offers to your advantage.
With so many offers out there, let’s sift through plastic to find the best choices for you, your wallet, and the planet.
Types of Offers
Credit cards tend to offer a range of different incentives. One or more of these options might be the best fit for you, depending on your lifestyle and goals.
Welcome bonuses are a great option if you’re shopping for a new credit card, as they usually allow you to earn greater rewards than what that card usually gives you, for a limited time. If you sign up for a card with a good welcome bonus, you can start earning points or cashback immediately and potentially rack up some big rewards fairly quickly.
Some cards will offer things like membership to subscription streaming services upon sign up, while others will multiply the rewards points you get when you spend.
The drawback is that welcome bonuses usually come with a time limit and a spending minimum. This means exactly what is says on the tin – in order to activate the welcome bonus, you need to spend a certain amount of money within a set amount of time.
The time limit is often within a few months of getting your credit card. If you don’t want to restrict yourself in that way or know that you have a strict spending limit, choosing a card based on its welcome bonus alone probably isn’t ideal.
A retention offer is an incentive for an existing cardholder to keep their account active. This makes sense, when you consider that the credit card issuer probably wants to keep your business! Some high reward cards will have high annual fees. If you aren’t using your credit card’s perks, you may be thinking it’s time to cancel and switch to a cheaper or no-fee card.
If you’re thinking of canceling, you might want to proactively ask for a retention offer yourself. If you’re a loyal customer, your credit card company may reduce or even waive your annual fees to retain your business. They may also offer increased rewards. If not, then it could be time to move on to a different card.
Targeted Spending Bonuses
Targeted spending bonuses are bonuses you get when you spend at certain places within a certain timeframe. For example, maybe you have a credit card that offers 1% cashback per billing cycle. With an active targeted spending bonus, you may be eligible for 5% cashback, for example, at select retailers within a determined time period.
This can vary from card to card and from month to month. It’s worth checking if your credit card does this and noting down when you can benefit. Though it can be hard to keep track of – since the targets can change frequently – it may be worth it for the points or cash you could get spending at places you’re likely to spend anyway.
Day-to-Day Spending Bonuses
Everyday spending bonuses are different from targeted spending. While both are rewards for using your credit card, day-to-day bonuses don’t have a specific target. Cards with this kind of bonus will give you cash back on every expense, without requiring you to meet a minimum spending requirement.
The reward is often – though not always – lower than it is for targeted rewards. Cards like Chase Freedom, for example, offer 1.5% rewards on all purchases – with bumps for specific spending categories, such as 5% back on groceries.
If you don’t use your card often or have a specific goal in mind then a card with these perks may be a good option for you.
How to Maximize Rewards
Using Travel to Maximize Miles
Maximizing your credit card rewards strategy may prove more beneficial if you align your spending with your goals.
Do you want to travel to Europe, or take the family to Disney World? A Southwest Credit Card yields some great travel rewards – amazing! However, they don’t fly to Europe or Asia. Before jumping on what seems like a great deal, it may be a good idea to check that it matches your goal.
In addition to having a goal in mind, you may also want to create a rough budget.
There may be interest rates, minimum spending requirements, or annual fees to consider. Before investing in a card, it can help to make sure that it is a good fit for your budget – and that you’ll actually spend enough to earn the travel miles you’re aiming for.
How to Shop to Maximize Store Rewards
The first thing to do might be to simply forget about your debit card. After all, you don’t get any points for using your own cash.
If your credit card offers store rewards, you might want to make sure that all of your purchases are made on that card. If you have multiple cards with multiple rewards programs, try and keep track of them.
There are apps for this, but you could even label the top of your card with clear tape and the name of the rewards. This way, you’ll be able to see it as you’re reaching into your wallet, without having to check your phone first.
Maximizing Gas Rewards
The theme of card organization continues when it comes to your gas rewards.
Know your rewards program. Check if there is an expiration date on your gas rewards. If your gas rewards are over and you have a card that offers cashback on all purchases, then it might be a good idea to start using that one at the pump.
Is there a cap on gallons? Some rewards will stop giving you a discount after you’ve reached a set amount of fillups or spending. The maximum discount may be capped too, or vary by location. These are all useful bits of information for you to try and keep a track of in order to maximize your rewards.
How to Maximize Cash-Back Rewards
Knowing what you spend the most on can be a useful strategy, as you can then sign up for a card that has the highest return in this particular category. For example, do you eat out a lot? Well, there’s probably a card for that. Prefer to cook at home? There’s likely one for grocery purchases too.
It can also be helpful to have a clear picture of what each cashback category entails.
For example, for a travel card, you might automatically think – flights. But travel can mean much more, with some cards allowing for bus and train tickets, or even parking garages, to be used as a part of their cashback-for-travel rewards.
Tips for Beginners
If you’re new to all of this, here are a few tips you might want to bear in mind when signing up for your credit card:
- Get the right card for your goals. Evaluate your spending and where you spend the most. If you aren’t going to spend enough to get rewards or cover the card’s annual fee, then you probably don’t want to waste your money.
- Charge everything (to get rewards). Do so while paying it back quickly to maintain a good credit score (and avoid interest charges)
- Use multiple cards, preferably from the same issuer. A neat trick is that if you use cards with different rewards programs, but from the same provider, you can usually transfer and combine points between cards.
- Keep track of your bonus categories – and when they change. Even cards that offer points on all purchases may run special promotions offering more points on specific categories. Keeping a track of the dates can help you to take full advantage of this.
- Take the time to look for hidden perks. In addition to activating more points for specific categories, cards with partner programs may offer incentives to use them at specific locations or give you discounts when you use their services. For example, purchasing airline tickets through Chases’ portal rather than the airline will earn you greater rewards.
- Be realistic. Make sure the card/s you choose make good financial sense for you, your goals, and your budget.
A Few Great Rewards-Based Credit Cards
Amex Everyday Credit Card
This American Express credit card lets you earn hundreds of points on everyday purchases. Customers earn 2 Membership Rewards points for every dollar spent at supermarkets and 1 point per dollar spent on all other purchases.
Every month you make 20 purchases or more, Amex rewards you with a 20% points bonus on top of your total points earned. It also has a Welcome Bonus of 10,000 points (if you spend $1000 in the first three months).
As a company, American Express is committed to following sustainability guidelines for businesses and has even begun using 100% recycled plastic for their credit cards. They also offer customers recycling services for old cards.
This card lets you select a cashback category, giving you the chance to save wherever you spend the most. At the 3% cashback tier, you can pick from things like gas, online shopping, dining, travel, drug stores, or home improvement.
You automatically get 2% back on groceries and 1% on all other purchases. Even better, there are no annual fees for this card.
The WWF card is issued by the Bank of America. Bank of America gives $100 to the WWF for each new qualifying card account. Then, for every dollar in net retail purchases the customer makes on the card, Bank of America contributes 8 cents to the WWF.
TCM Bank’s Green America Visa® Credit Card
This card was developed in conjunction with Green America, a nonprofit organization that promotes environmental awareness and ethical consumerism. Cardholders can donate a portion of every purchase made to Green America’s clean air, green business, and conservation projects.
Points never expire, and customers earn one reward point per dollar. This card also doesn’t charge an annual fee.
This card offers rewards that help save the environment. For every purchase that you make, this card will plant a tree with the goal of offsetting carbon emissions. Every month you’ve offset your carbon footprint with enough trees, you earn one percent cash back on all purchases.
To join the waitlist for the Aspiration Zero, or to find out more about Aspiration’s environmental work, check out their site today.