Are You Getting The Most Out Of Your Rewards Cards?

by Jason Steele on November 6, 2012

Smart credit card users are always trying to earn the most rewards while paying the fewest fees. But are all of them earning the highest possible rewards?  To determine if you are really earning as much rewards as possible, consider the following questions:

Are you paying for every possible expense with your card?

The key to maximizing credit card rewards is maximizing card usage. There is nothing wrong with using cards for the smallest expenses, yet it is the largest ones that offer the most potential value for rewards. Cardholders can look into the possibility of earning rewards for paying telephone and utility bills, insurance payments, and medical bills.  Even your taxes can be paid with your credit card. Nevertheless, cardholders should be very careful to ensure that any convenience fees paid are less than the rewards earned through spending.

Do You Always Pay Your Balance In Full?

Even more important than maximizing spending is ensuring that every credit card balance is paid in full and on time, each month. Doing so eliminates any interest payments and even offers cardholders a free loan of up to 50 days. On the other hand, using a rewards card to carry a balance is a very poor choice. Unfortunately, these products will have higher interest rates than the most competitive non-rewards cards and the difference will almost always negate any rewards earned. If you carry a balance, even occasionally, you should be looking for a card that offers 0% APR balance transfers, not the most attractive rewards.

Do You Use More Than One Reward Card?

The best way to earn the maximum rewards from your credit cards is to use different cards at different merchants. Travelers can use a specific airline’s card for to earn double miles on airfare purchases. Cardholders can also earn fantastic rewards at grocery stores by using the Blue Cash Preferred Card from American Express. It earns an unparalleled 6% cash back at supermarkets. Other cardholders have products co-branded with the merchants they use most that offer exception rewards for their patronage. Finally, another multi-card strategy is to use a reward card for purchases that can be paid in full, and a low interest, non-rewards card for times when you must carry a balance.

By taking a few moments to consider how they are using reward cards, credit card holders can maximize the points, miles, or cash back that they receive.

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