3 Reasons to Diversify Your Credit Card Rewards

smiling woman sitting on couch holding credit card

At Experian, one of our priorities is consumer credit and finance education. This post may contain links and references to one or more of our partners, but we provide an objective view to help you make the best decisions. For more information, see our Editorial Policy.

Credit card rewards come in many different forms and provide many different ways to earn. While it can be simpler to stick to just one credit card, there are many benefits to diversifying your cards to maximize your rewards.

If you're comfortable with using multiple credit cards, getting cards across multiple rewards programs can be a good idea. Here's how to diversify your credit card rewards, and what to watch out for.

How Credit Card Rewards Work

Many credit cards earn rewards whenever they're used to make eligible purchases. These rewards typically come in the form of cash back, points or miles:

  • Cash back: Cash back credit cards earn rewards that can be directly redeemed for cash, statement credits, gift cards and other options.
  • Points: You may earn general rewards points or travel points. With a travel credit card, you may earn general travel points that give you a lot of flexibility with how you redeem, or you might earn airline or hotel points, which limit you to a specific travel brand.
  • Miles: This rewards currency is generally restricted to airline credit cards and select general travel credit cards. Miles can be flexible with a general travel card, but they're more restrictive with airline loyalty programs.

3 Reasons to Diversify Your Credit Card Rewards

If you like getting rewards in return for using your credit cards for everyday spending, you may be leaving value on the table if you only stick to one credit card or rewards program. Here's how getting and using cards across multiple programs can help.

You'll Get More Flexibility

While some credit cards provide a lot of value in certain areas, they may leave you hanging in others.

For example, the Capital One VentureOne Rewards for Good Credit card offers a lot of flexibility with its miles redemption: You can use your rewards to do things like book travel through Capital One, book travel with your card and use your miles to get a statement credit, or transfer your miles to one of Capital One's airline or hotel partners. But if you like the idea of getting cash back sometimes, too, the card's redemption rate could be low.

You might want to add a good cash back rewards credit card to your wallet to get the best of both worlds. The Bank of America® Customized Cash Rewards credit card, for instance, offers 3% cash back on a category of your choosing and 2% at grocery stores and wholesale clubs on up to $2,500 in combined purchases as well as 1% on all other eligible purchases.

You may be matched with this and other cards at Experian CreditMatch

Find Out If You're Matched

You'll Save More Money

Saving up cash back or general travel points to book a flight or hotel stay can be a great way to save money. But if you have an airline credit card or a hotel credit card, you might be able to get more value with that rewards program.

Alternatively, you may choose to get one cash back credit card that offers great rewards on gas and groceries and another that provides bonus rewards when you shop online.

The more rewards programs you're earning with, the more opportunities you'll have to take advantage of the special savings each one provides. The downside is that you'll have more cards to manage, which can become a hassle.

You Won't Feel the Effect of Devaluations as Strongly

It's unfortunately common for frequent flier programs and hotel loyalty programs to devalue their rewards programs. This can happen if a program increases the number of points or miles required for certain flights or hotel stays, or even for all reservations.

If you have all of your rewards with one program, you may feel the sting of the devaluation more strongly. But if you have rewards across multiple programs, a negative event with one program won't be as detrimental to your overall value.

What to Keep in Mind When Diversifying Credit Card Rewards

Although there are many benefits to earning rewards with multiple credit card programs, it's important to focus on responsible credit card use and to maintain a good balance based on your preferences and needs:

  • Set up automatic payments. The more credit cards you're using, the harder it is to keep up with the monthly payments. Set up autopay on all of your accounts to avoid missing a payment. Also, make it a goal to pay your bill in full to avoid interest charges.
  • Consider the time investment. Optimizing your credit card rewards can save you money, but it can also be very time-consuming. Find a good balance that works well for you. If you start missing opportunities to maximize your rewards because you're overwhelmed, you may have too many cards.
  • Focus on what's best for you. Think about the types of rewards that work best for you. While travel points and miles can be appealing, there's a steep learning curve when it comes to maximizing their value. If you prefer simplicity, stick with cash back. But if you have the time and desire, focus on travel rewards.

How to Find the Right Credit Cards for You

As you search for different card options, use a tool like Experian CreditMatch™ to get an idea of which cards you may qualify for based on your credit profile. You can break down card options by type of rewards, rewards rates, welcome bonuses and more. Pick cards that work best for you based on your spending habits, preferences regarding rewards and other features, and your credit profile.

The purpose of this question submission tool is to provide general education on credit reporting. The Ask Experian team cannot respond to each question individually. However, if your question is of interest to a wide audience of consumers, the Experian team may include it in a future post and may also share responses in its social media outreach. If you have a question, others likely have the same question, too. By sharing your questions and our answers, we can help others as well.

Personal credit report disputes cannot be submitted through Ask Experian. To dispute information in your personal credit report, simply follow the instructions provided with it. Your personal credit report includes appropriate contact information including a website address, toll-free telephone number and mailing address.

To submit a dispute online visit Experian's Dispute Center. If you have a current copy of your personal credit report, simply enter the report number where indicated, and follow the instructions provided. If you do not have a current personal report, Experian will provide a free copy when you submit the information requested. Additionally, you may obtain a free copy of your report once a week through December 31, 2022 at AnnualCreditReport.