Credit cards to help maximize rewards and benefits
Quick insights
- Pairing different types of credit cards may help cardmembers maximize rewards across multiple spending categories.
- Using two cards can potentially expand access to cardmembers benefits like protections or statement credits (depending on the cards).
- A common pairing strategy is to use a flat-rate cash back card for everyday spending while reserving a category-specific card for purchases at restaurants, at grocery stores or during travel.
Credit cards have evolved from a simple payment tool into strategic assets that can be used wisely in combination with one another. Pairing different types of credit cards and matching purchases to each card’s strongest earning categories may help cardmembers earn more rewards on their spending.
Understanding how these pairings work and what features matter most to you may help you get more out of your everyday purchase and cardmember perks.
Types of rewards credit cards
There are many types of rewards credit cards, some focused on specific categories. These cards are often designed to help cardmembers earn rewards in ways that support their spending habits and provide cardmember benefits that typically align with the card type.
Common types of rewards credit cards include:
Cash back cards
Cash back cards are a fairly straightforward category of rewards cards. They earn a fixed percentage of every purchase as cash back. Some versions offer a flat rate on all purchases, while others feature rotating or tiered categories (like opportunities to earn accelerated rewards at grocery stores and gas stations, for example).
When comparing cash back cards, you may want to consider annual fees, as well as other factors like rewards rates, redemption options and eligibility requirements.
Travel credit cards
Travel credit cards allow cardmembers to earn points or miles on purchases, typically with the ability to earn accelerated rewards on travel purchases. In many cases, redeeming rewards for travel (such as flights and hotel stays) provides the most value.
Additionally, some travel credit cards may offer cardmember benefits like airport lounge access and travel protection benefits. Annual fees vary, but cards with broader ranges of benefits tend to have higher fees.
Co-branded credit cards
Co-branded cards are created through partnerships between card issuers and specific brands, such as airlines, hotels or major retailers. Typically, purchases with the associated brand will earn rewards at an accelerated rate.
If partners are within the travel industry, these will also be considered travel cards and may provide niche cardmember benefits like complimentary checked bags or elite status. Co-brand cards may work well for brand-loyal consumers who frequently shop with a specific merchant or travel with a preferred carrier. Like with other types of cards, co-branded credit cards may have an annual fee.
Evaluating cardmember benefits
Some rewards credit cards come with a wide variety of cardmember benefits. Some common perks include:
- Purchase protection
- Extended warranty coverage
- Travel protection benefits
- Partner discounts and complimentary memberships
- Airport lounge access
- Travel statement credits
- Elite status on airlines or with hotels
By combining cards, you might expand the range of benefits available to you. For example, one card might offer travel protections while another could provide unique purchase protections or access to special events.
It can be helpful when using a multi-card strategy to compare benefits across cards (as well as potential fees) so you don’t end up with overlapping benefits which you may not end up using.
Common credit card pairings and strategies
Pairing credit cards is a strategic way to potentially maximize your overall earning potential. By holding cards that provide accelerated rewards across multiple spending categories, you have a greater opportunity of earning more points on your purchases.
Some common credit card pairings include:
• A travel credit card and a flat-rate cash back card
• A flat rate cash back card and a card with rotating bonus categories
Regardless of which pairing you use, selecting cards from the same issuer or within the same rewards ecosystem could provide an advantage. This strategy may allow cardmembers to transfer rewards among cards and pool their points, giving them greater redemption options.
What makes an effective credit card combination?
A strategic card combination for helping to maximize rewards and benefits is often one that aligns closely with your spending habits and financial goals. Factors to consider may include:
- How rewards categories overlap or complement each other
- What types of purchases you typically put on a credit card
- Annual fees
- Whether the benefits offered match your lifestyle and needs
- How and when rewards can be redeemed
It may also be helpful to consider how applying for and managing multiple cards may impact your credit. Applying for a credit card typically results in a hard pull of your credit and missing payments can affect your credit score. In addition, it could become more time-consuming to track minimum payments and due dates across multiple cards.
In summary
Pairing different types of credit cards is one way to help maximize rewards on your purchases. By understanding how cash back, travel and other rewards credit cards work and how their features could complement each other, you may be able to find combinations that fit your spending and lifestyle. When considering card combinations, it might be a good idea to review how the cards’ rewards categories line up with your typical spending as well as any overlapping benefits and fees.
