Tips for maximizing your credit card rewards while shopping
Quick insights
- Knowing a credit card’s rewards structure, including rewards and bonus categories, may help you earn more points or cash back.
- Cardmember benefits—travel and purchase protections that apply when you make an eligible purchase—are other factors you may consider to help you get the most out of a credit card.
- Sign-up bonuses and shopping portals are other credit card features that could potentially add to your rewards.
There can be many benefits to using a credit card, from building credit to the ability to reserve hotels and car rentals at preferential rates. Some credit card purchases could provide more rewards to you than others. As you assess when to use your credit card, you may consider your credit card’s rewards, benefits and other features, in addition to your own financial needs.
Read on to find out some ways to help maximize your credit card rewards.
How to maximize credit card rewards and benefits
If you’re looking to get the most out of a rewards credit card, there are a couple things you may want to keep in mind. These include the card’s rewards structure. You may accrue points, miles or cash back as you spend on the credit card. As you compare credit cards that earn cash back vs. points, you may assess which rewards program aligns with your spending habit.
Cardmember benefits are another consideration that may help you decide when to use your credit card. You may get certain financial protections on eligible purchases. Some credit cards come with benefits that help you get travel protections which may reimburse you if a trip doesn’t go as planned or purchase protections that could provide compensation if an eligible item you recently purchased is damaged or stolen.
Strategic use of credit cards may help you earn rewards and more on the purchases you were planning to make anyway. Of course, overspending or not paying off your monthly balance may lead to interest charges that could potentially offset rewards you earn.
Knowing the following features of your credit card may help you maximize your rewards.
Rewards categories
Rewards categories may vary across credit cards. The categories often reflect the type of credit card. For example, travel rewards credit cards may reward travel purchases more generously than other credit card types.
Typically, rewards credit cards have a baseline rewards rate on purchases and may offer a higher rewards rate within certain spending categories. Here are some examples of rewards categories:
- Dining
- Drugstores
- Travel
- Gas stations
- Grocery stores
- Gym memberships
- Fitness equipment
Knowing the rewards categories for any credit card you have may help you make strategic choices about when to use a credit card.
For example, a cardmember might use a hotel-branded credit card to reserve a stay with the hotel brand due to the rewards rate that may be relatively higher compared to other credit cards. The same cardmember may put airfare on a travel rewards credit card and everyday purchases on a different credit card due to the baseline rewards rate on all purchases.
Benefits
Some credit cards come with travel and purchase protections that may be a reason to consider using that credit card for certain purchases. If your credit card offers these protections, they usually apply when you use your credit card for the following purchases:
- Travel expenses: When you purchase airfare or other prepaid travel expenses with an eligible credit card, you may be able to get reimbursed if your trip is interrupted or cancelled for a covered reason. A trip cancellation and interruption benefit may give you peace of mind when you travel.
- Car rentals: You usually need a credit card to get a rental car, and if you have auto rental coverage, that could be another reason to use that card for this purchase. When you book a rental car with a credit card that comes with this benefit, you may need to decline the rental car company’s coverage in order to use the benefit.
- Items with a manufacturer’s warranty: Some credit cards may provide you with an additional year of warranty protection when you purchase eligible items with a credit card.
- Electronics and household appliances: If your credit card comes with purchase protection, you may be able to get reimbursed for damage, theft or accidental parting for eligible items, within a set period of time, when you pay with your credit card.
Shopping portals
You may not realize that many credit cards have shopping portals. If your credit card has a shopping portal, you can usually find it within the credit card’s mobile app or website.
Within the portal, you may be able to find promotions at participating retailers and stores. It’s possible you could even earn rewards at a higher rate than if you made the purchase directly with the retailer.
Bonus categories
Bonus categories are rotating rewards categories, which typically rotate on a quarterly basis. For example, a credit card with bonus categories may offer rewards on gym membership, grocery store and hotel purchases in the first quarter of the year and reward purchases with gas stations, big box stores and streaming services in the second quarter.
Bonus categories require a little extra work from the cardmember, as they usually require previous activation. Cardmembers may keep track of these changing categories and use them to assess which purchases to put on a credit card.
Sign-up bonuses
There are credit cards that may come with a sign-up offer for new cardmembers. Usually, you’ll need to spend a certain amount within the first few months of receiving the credit card before you’re eligible for the bonus. During these initial months, some cardmembers may choose to put all purchases on their credit card until they reach the spend threshold to qualify for the bonus offer.
In summary
If you want more out of your credit card, it may be helpful to know about any rewards and bonus categories, cardmember benefits, sign-up offers or shopping portals that come with it. Choosing a credit card that matches your spending habits may help you earn rewards more easily.
