10 ways you might use credit card rewards for essentials
Quick insights
- Credit card rewards can be a useful tool for earning while covering essential expenses, from groceries and clothing to recurring bills.
- Strategic use of your credit card can help you earn and redeem rewards, turning everyday purchases into savings.
- With careful planning, credit card rewards can help you manage your cash flow and reduce your out-of-pocket expenses.
Credit card rewards can be useful when it comes to managing your finances. Let’s go in more detail below.
Effective ways to use credit card rewards for essentials
Depending on the type of card you have, they can help you cover a range of essential expenses, from purchases at grocery stores to utility bills. Let's delve into some effective ways to use these rewards.
10 ways to use credit card rewards for essentials
Rewards from credit cards can be beneficial when used wisely. Here are 10 ways you might use your credit card rewards for paying bills:
- Grocery shopping: Many cards offer bonus rewards for grocery store purchases. You can use your credit card rewards for groceries by redeeming points for gift cards or statement credits, which can help reduce your grocery bill.
- Paying utility bills: Some credit cards offer rewards for paying regular bills. By setting up automatic payments for your utilities, you can earn rewards to help lower your monthly utility bills.
- Healthcare expenses: Some credit cards offer additional rewards for spending on health centers, including doctor’s visits and medical supplies. By using your card for these expenses and redeeming rewards, you can potentially help alleviate some of the financial burden associated with healthcare.
- Gas purchases: If you drive regularly, a credit card that offers rewards for gas station purchases can help reduce your transportation costs.
- Online shopping: Some credit cards may offer bonus rewards for online purchases. If you regularly shop online, this can be a helpful way to earn rewards and offset your online shopping expenses.
- Dining out or ordering in: Some credit cards offer rewards for dining purchases, including takeout and delivery. Redeeming these rewards may help reduce the cost of meals.
- Pharmacy purchases: Purchases made at pharmacies can earn you rewards with certain credit cards, which may help lower your healthcare costs.
- Public transportation and rideshares: Regular users of public transportation or rideshare services can benefit from credit cards that offer rewards for these expenses.
- Phone bills: Paying your phone bill with a credit card can earn you rewards with certain providers.
- Insurance premiums: Some credit cards offer rewards for insurance premium payments on auto, home, rental or other coverages, which may help reduce the cost of your insurance coverage.
Maximizing your rewards for essentials
To maximize your rewards, it's important to understand the specific benefits of your credit card and use it strategically. This might mean using one card at grocery stores and another for gas stations. It could involve setting up one of your cards for automatic payments for your bills. Whenever possible, try to pay off your balance in full each month to help avoid interest charges that could outweigh the benefits of your rewards.
Types of rewards beneficial for essential purchases
Cash back rewards can be applied directly to your statement balance, helping to reduce your out-of-pocket expenses for essentials. However, points or miles can also be valuable if they can be redeemed for gift cards or statement credits that you can use for purchases.
Understanding your credit card's reward program
Every credit card's reward program is different. It's important to read the terms and conditions as well as understand how you can earn and redeem rewards. This might include learning the categories that earn bonus rewards, limits on the amount of rewards you can earn and how to redeem your rewards for maximum value.
The bottom line
Credit card rewards may serve as a useful tool for helping you manage your cash flow and potentially lower certain expenses. By understanding your credit card's reward program and using your card strategically, you can use your rewards program to help cover the costs of your purchases. Whether it helps you with expenses for groceries, healthcare or paying bills, every point or cash back reward can make a difference.
