A recent study of 1,271 rewards credit card holders conducted by U.S. News and World Report shows that a majority of consumers don’t maximize the rewards they can get from these types of products. This is due to a handful of factors including, not paying off their balances in full every month, researching reward credit card options before signing up, and comparing the rewards cards they currently have to new offers when they become available. Other interesting results from the study reveal that 27% signed up for a rewards credit card in order to earn cash back, 21% for travel rewards, and 17% in order to take advantage of a rewards credit card with no annual fee. Also, 20% of the pool surveyed carried a balance from month to month, which can be the fastest way to erase any rewards you have earned. Here at Casavvy we view rewards credit cards as a way to save on the purchases that you make, by using the rewards you earn to actually lower the cost of the item you are buying. Knowing and understanding your options for rewards credit cards can be quite beneficial in the long run and well worth whatever time you spend doing a little research.
What Do You Want From a Rewards Credit Card?
When searching for a rewards credit card, many factors should be considered in your choice. What are the main components to consider when choosing a credit card? The first thing that should come to mind is where you do a majority of your spending. With all the sign-up bonuses and potential rewards available, why not use a rewards credit card to make your purchases and get some savings in the process. In todays world credit card companies want your business, and they will give away a lot in order to get it. There are many different types of rewards credit cards that are available, and if its rewards you are after, take a look at some of the things that should be considered when choosing a rewards credit card.
Earn Points With A Rewards Credit Card
There are many rewards credit cards available which offer points for every dollar you spend. In many cases these points have no limit on the amount you can acquire and can be used for almost anything. For example, the American Express® Premier Rewards Gold Card offers 3x points on every dollar you spend directly with airlines, 2x the points on every dollar you spend on gas, groceries, and restaurants, and 1x points on everything else. On top of that, they are now offering a Membership Rewards bonus of 25,000 points when you sign up and spend $2,000 within the three months of opening your account. After you accumulate a decent amount of points, then apply them to what will give you the most value.
There is a lot of options when it comes to point rewards credit cards. Which is why you should consider comparing cards like the one above, to other rewards credit cards before you make your decision. Just like the Amex Premier Rewards Gold Card, many points card come with the opportunity to earn bonus points in certain categories. Find the one that maximizes where you spend the most to maximize your savings.
Travel Rewards Credit Cards
If you are someone who travels a lot, or wants to travel more but can’t because of the expense that comes with it, than a travel rewards credit card may be for you. Travel rewards cards are unique in that you are earning points or miles, which can be used specifically for travel expenses. However, many rewards credit cards now make it possible to use your rewards towards gifts, statement credits, and even cash. But, because you will do some research, you will find that the most value for redeeming rewards from a travel rewards credit card will come when using them for travel expenses.
The Chase Sapphire Preferred Card is a great example. With it you will earn 2x points on travel and dining expenses and 1x points on everything else. But, when you redeem your points through the Chase Ultimate Rewards portal for travel purchases you will get a 25% increase in the value of your points. They are even offering a signup bonus of 50,000 points when you spend $4,000 in the first 3 months of opening your account. Which is worth up to $625 when used for travel purchases through Chase.
If you are loyal to a specific airline, or you always stay at a certain hotel, then a rewards credit card like the Gold Delta Skymiles Card from American Express, or the Marriott Rewards Premier Credit Card, would help you earn rewards at these establishments more quickly. As well as getting benefits such as waived checked bag fees and room upgrades.
Cash Back Rewards Credit Cards
If you are just looking to earn some cold hard cash back from the purchases you make, then a cash back credit card is what you are looking for. You are basically getting paid to spend money. Cash back credit cards are great because there is no restriction on what you can use your cash back for. You can apply the cash to your current billing statement, or you can let the cash back rewards pile up and apply to them to a large purchase you are saving up for. The Citi Double Cash Card offers 1% cash back on all of your purchase and then 1% cash back when you pay them off. A easy and straightforward way to earn your cash back from the things you buy.
If you do a little research you will find there are many different cash back cards available and some come with a decent sign-up bonus, as well as offering extra cash on some of the things you buy everyday with their bonus categories. The key is finding the right cash back credit card that works for you in order to maximize the rewards you earn each month.
Gas Credit Cards
If you know one of your main expenses each month is gas, then this is the type of card you want. There are gas rewards credit cards, which can rack up rewards very quickly and they can be used on almost anything. The Bank of America Cash Rewards Card offers 3% cash back on all gas purchases, 2% cash back on all grocery and wholesale club purchases, and 1% cash back on everything else. There is a cap on the combined bonus categories of $2,500 in spending each quarter. This card is also offering a bonus of $150 after you spend $500 in the first 90 days of your account.
Maximize Your Rewards
It is important to note that in order to qualify for a rewards credit card you need to have good to excellent credit. You also need to make sure to always pay off your balance in full every month as well. Any interest that you are charged for a remaining balance will most likely erase any rewards that you have earned. Also, be sure to see if the card you want has an annual fee. With rewards credit cards it is a mixed bag on the ones that do have an annual fee and ones that don’t. Then double check any signup bonuses that they are offering. This may or may not offset the annual fee and determine if it is the right rewards credit card for you.
Do Your Research
No matter what you are looking for, there is a rewards credit card available that can get you closer to the results you deserve. The credit card companies want to reward you for using their cards to make your purchases. So take a look at all of the different rewards credit cards available and get closer to earning rewards for spending money you were going to spend anyways.
Here at Casavvy we want to help in any way to get you the most out of the money you spend. Email us at firstname.lastname@example.org and we would be happy to do the legwork for you, for free, to find the right rewards credit card for you.
The offers mentioned were viewed as available as of 8/9/2017.