7 Credit Card Reward Tips Many People Don't Follow

By Craig Ford. Last updated 4 May 2017. 7 comments

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As someone who advises a lot of people about credit card rewards, I'm often surprised by what the average person forgets to do when it comes to their rewards credit cards. Here are some helpful tips for making the most of your card rewards. (See also: 5 Best Travel Rewards Credit Cards)

1. Conduct an Annual or Bi-Annual Rewards Card Audit

This is the biggest mistake people make. Ten years ago, you might have done some research and found that card XYZ was the best card (according to your needs) on the market. The result is that 10 years later, you're still using the same card.

Credit card rewards earning rates and redemption benefits change. New card offerings can easily make old card offerings obsolete. Recently I was talking with a relative about his use of a certain card, and I realized that by re-evaluating the current card offerings, he would be able to earn an extra $100-$200 per year.

2. Don't Chase After Rewards When Payments Are Costing You More

It's human nature to think that we're smarter than most other people, and it's amazing the number of people who carry a balance on their rewards cards, thinking they are doing something smart because after spending $10,000, they get a $100 reward. The problem is that the $100 reward is costing them $1,000 in interest . That simply doesn't make sense.

3. Don't Use a Point Card If the Value Is Less Than a Penny Per Point

Personally, I'm a big fan of airline and hotel points. I find that our family can easily get a 2-5 cent value out of each dollar point we spend on different credit cards. However, there are a lot of people who will redeem their points at below even a .05 cent value. That's a bad idea. If you're not going to redeem your points for valuable items, then you should just use a straight cash back card that will at least give you 1-2% on every purchase. If you're earning less than 1% value from your points, it's time to consider a new card. (See also: 7 Biggest Mistakes When Redeeming Credit Card Rewards)

4. Always Know the Most Valuable Use of Your Points or Miles

Free is good, but more free stuff is better.

You can use your points to buy things like an iPod or get a gift card, but without evaluating the value for each point you're getting, you could be missing out on a much higher payout for your hard earned points. For example, getting an international fare with your points will almost always net you more value per point than a gift card or cash out. Most credit card won't expire your points as long as you keep your card active, so there's no harm in waiting to accumulate enough points to get that dream getaway, rather than quickly redeeming for a small item. (See also: Are You Wasting Your Credit Card Rewards?)

5. Develop a Credit Card Spending Strategy

If you own more than one rewards card, do you know which is the best card to use for specific situations? Certain cards offer extra points for gas, office supplies, restaurants, travel, and other specific categories. You must know the best ways to use your cards.

Right now I have three cards that I rotate. How, when, and where I use them is determined by the rewards potential by each use. A spending strategy doesn't just consider rewards, but other benefits like warranty coverage, rental car benefits, and foreign currency exchange fees.

Some cards offer one additional year of extended warranty coverage, so use those to buy electronics. When renting cars, you should give consideration to cards that offer primary rental car insurance. And you don't want to spend a few thousand dollars on your vacation overseas only to find out that if you used a different card you could have saved hundreds of dollars in foreign currency exchange fees. Be sure to use a 0% foreign currency exchange credit card when traveling overseas.

6. Don't Overlook a Rewards Card Simply Because It Has an Annual Fee

If you can get a good rewards cards that doesn't have an annual fee, then that's great. However, I've known people who could earn a lot more points by using a rewards card with an annual fee, but they refuse to do it out of principle, even when the rewards value far outweighs the annual fee cost.

Don't pay an annual fee if you're not going to get more rewards for doing so. However, I've advised a lot of people to get an rewards card with an annual fee because they'll actually end up with more rewards value than the cost of the annual fee.

7. Focus on Diversity in Card Brands

Different issuers offer different benefits with their cards. One company might include special purchase protections while another various insurance you can take advantage of while you're traveling. Often, the rewards are not just spending bonuses, but special discounts and access for cardmembers. (See also: Awesome Credit Card Perks You Didn't Know Your Card Offers)

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

Guest's picture

Nice tips! I think your point about not overlooking cards with annual fees is important for consumers to remember. Although an annual fee is undesirable in most cases, reward cards that charge an annual fee often have the highest reward potential if you actually use the card (and pay it off!) on a regular basis...

Guest's picture

All good points. Personally I think the most important of all of them is #2, the one that touches on payments. If you're carrying a large balance, or any balance at all on a card, it can hurt or in some cases negate any benefit to earning rewards, regardless of what they are. Most people get all excited about earning points, are enticed by sign-up bonuses, and then end up carrying a balance even if that isn't their original intent. Unless you're in a situation where you can treat your card as cash and pay your balance off every month you have to look at the pricing. If carrying a balance is your reality the card's pricing is of equal if not more importance than the rewards structure.

Craig Ford's picture

Thanks for highlighting the second point. It do quiver sometimes when I hear people talking about all the rewards they've earned when I know they've got credit card debt. It simply doesn't add up.

Guest's picture


No problem -- unfortunately the voice of experience. It happens too with charge cards that carry annual fees. If you're paying a high fee on a charge card you also have to make sure that it's worth your time, meaning exceeding the break-even point on spend.

Guest's picture

I use my points for the annual membership fee.

Guest's picture

It is true that some reward cards with annual fees are good as long as you are able earn a lot of reward points. I had an airline card and I was able to earn free flights. The annual fee was not an issue.

Guest's picture

Another way to utilize your travel cards on flights is that many cards allow you to use miles or points to pay for a portion of the flight with a combination of points & top up dollars if you have 50% of the required points An example is say the reward requires 30000 points & you have say 15000 points or more use the points & top up the balance required with a cash payment usually so many cents per point This gives you a half price ticket or better & saves you money for the trip or other things Have used this strategy for many years & had a portion of the trip paid by rewards every year

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