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You might think a credit card is just a piece of plastic to make buying the things you need easier. But rewards credit cards can also help you rack up free travel, cash back and other benefits.
To maximize credit card rewards, you need to understand all the perks your card offers and how you can use them to your advantage. By making some strategic choices, such as applying for a great sign-up bonus, using your card at stores where you can earn bonus points and responsibly paying off your bills on time, you can rack up rewards worth hundreds or even thousands of dollars.
Follow these tips to get the most value from your credit card rewards.
1. Know What Your Credit Cards Offer
The first thing you need to do is figure out exactly how your rewards cards work, and what benefits they offer.
Points, Miles and Cash Back
Credit card rewards come in a few different forms. There are airline miles you can redeem for flights on a specific airline or its partners. There are also hotel points you can use for award stays. Some cards earn cash back you can use to shave a few dollars off your monthly statement. Finally, some credit card issuers such as American Express and Chase have their own types of points you can either transfer to different airlines and hotels, or redeem for cash back on travel and other expenses. Read up on the type of points or miles your credit cards earn and all the ways you can put them to use.
In addition to earning points, rewards credit cards usually offer other types of benefits. For example, an airline card like the Delta SkyMiles® Gold American Express Card gets you a free checked bag and priority boarding when flying. The Capital One® Venture® Rewards Credit Card will give you a statement credit for up to $100 for either a Global Entry or TSA Precheck application once every four years, which makes getting through the airport easier. Knowing the benefits offered by your rewards cards and actually putting them to use can save you time, money and hassle.
If you have more than one credit card from the same bank, it might be possible to combine the rewards you earn from all of them. For example, the Chase Freedom Unlimited® earns 1.5 Ultimate Rewards points (Chase's own points program) per dollar spent on all purchases. If you have this card alone, that's worth 1.5% cash back. However, if you also carry the more premium Chase Sapphire Preferred® Card or the Chase Sapphire Reserve®, you can combine the points you earn from all your cards and transfer them to the Ultimate Rewards program's 10 airline and three hotel partners, including United, Southwest, JetBlue, Hyatt and Marriott, among others. So carrying a couple different cards from the same bank can open up your rewards options.
The other important thing to keep in mind is whether your card charges an annual fee to keep it open each year. While many great rewards cards do not have annual fees, most do these days. Some, like The Platinum Card® from American Express, even charge hundreds of dollars per year in exchange for benefits like airport lounge access, Uber credits and hotel elite status. Tally up the annual fees on your rewards cards and see if you are getting enough value from their benefits to make paying for them worth it year after year.
2. Take Advantage of an Intro Bonus
One of the best ways to maximize credit card rewards is to score an intro bonus. An intro bonus, also known as a sign-up bonus, is usually an offer worth thousands of points or miles you can earn with a new credit card. It's a little more complicated than just signing up for a new credit card and getting a bunch of bonus points, though.
To earn an introductory bonus, you usually have to spend a certain amount in eligible purchases within a set time frame. For example, if you're approved for the Chase Sapphire Preferred® Card, you have 3 months to make $4,000 or more in purchases using your card to earn its intro bonus of 60,000 Ultimate Rewards points. If you don't meet that spending threshold, you don't get the bonus. Before applying for any new cards, make sure the intro bonus offer is worth it to you and that you can meet any purchase requirements to earn it.
3. Look Out for Promotions
Sometimes rewards credit cards offer limited-time promos to attract new customers and get existing ones to use their cards more.
Credit cards sometimes offer bonus miles or points on purchases made during a certain time period, usually with a dollar cap. Pay attention to any emails or mailers that you receive from your card issuer to see if you might be targeted for a promotion like this.
Some premium rewards credit cards also offer annual benefits that reset either each calendar year or every year you keep a card open and pay its annual fee. For example, the American Express® Gold Card will refund you up to $10 per month when you use it to pay for orders from Grubhub, Seamless, The Cheesecake Factory, Ruth's Chris Steak House, Boxed or participating Shake Shack locations. It also comes with up to a $100 credit each calendar year toward eligible airline fees like charges for checked bags or seat assignments on one selected airline. Taken together, that's around $220 in value cardholders can get each year—but only if they pay attention to their benefits and actually put them to use within the specified time period.
4. Spend Strategically
In the past, most rewards credit cards simply allowed users to earn 1 point or mile per $1 spent, no matter where they used them. But with so many more rewards credit cards available these days, banks have had to raise their game and offer bonus earning opportunities to keep cardholders interested. It's important to think about the kinds of purchases you usually make and use the credit cards that will earn the most points or miles for them.
Many travel rewards credit cards earn multiple points per dollar spent when you use them to make purchases at specific types of businesses. For example, the Hilton Honors American Express Surpass® Card earns 12 points per dollar on eligible Hilton purchases, but also 6 points per dollar for eligible purchases at U.S. restaurants, U.S. supermarkets and U.S. gas stations. It racks up 3 points per dollar on all other eligible purchases. The Citi® / AAdvantage® Platinum Select® World Elite™ Mastercard® earns 2 miles per dollar not just on American Airlines purchases, but also at gas stations and restaurants. Make sure you are carrying rewards cards that rack up the most points or miles on the types of things you usually buy so you can boost your earning as much as possible.
Quarterly Bonus Categories
Instead of permanent bonus categories, some rewards credit cards offer bonuses that change every few months. With the Chase Freedom®, for instance, cardholders who activate the bonus category each quarter can earn 5 points per dollar on up to $1,500 in combined purchases in those categories. Those categories could include gas stations, select content streaming services, movie theaters, restaurants and more. With the Discover it® Cash Back card, cardholders who activate can earn 5% cash back up to a quarterly maximum at different places each quarter. If you carry a card that offers quarterly bonuses, be sure you check every couple of months to see where you can accrue extra points, and then use your card at those merchants as much as possible.
Use Multiple Rewards Cards
Chances are you have more than one credit card, and that's a good thing because it means you can earn bonus points at even more places. The popular Chase Sapphire Preferred® Card earns 2 points per dollar at restaurants and on a wide range of travel expenses like airfare and hotel stays as well as train tickets, ride shares and even parking meters. By contrast, the Amex EveryDay® Preferred Credit Card earns 3 points per dollar on up to $6,000 in eligible purchases per calendar year at U.S. supermarkets, and 2 points per dollar at eligible U.S. gas stations with no cap. It even offers a 50% bonus on all the points you earn each billing period when you use the card 30 times or more. If you combine these two cards and use them strategically, you could be earning bonus points on nearly every dollar you spend.
5. Pay Off Balances in Full
Before you get carried away with charging everything, though, remember that the key to getting the most value from credit card rewards is to keep your credit in good shape. Only use your rewards cards to make purchases you would otherwise, and be sure to pay off your balance on time and in full every month.
Carrying a balance can lower your credit score over time otherwise. The interest and late fees you have to pay on credit card balances will also cost far more than your rewards points are worth. By using your credit cards responsibly, though, you can get plenty of value from the rewards you earn with them.
The Bottom Line
Rewards credit cards are a fantastic way to earn free travel, cash back and other benefits. By looking at the perks your credit cards offer, taking advantage of any bonus-earning opportunities, and using them responsibly, you can reap hundreds—or even thousands—of dollars in value from rewards credit cards each year. For more information on rewards credit cards and to see current offers, you can pull up personalized options through Experian CreditMatchTM.
All information about the Chase Freedom® and Chase Freedom Unlimited® has been collected by Experian and has not been reviewed or provided by the issuer of the card. Offer details may be outdated.