Are you looking to maximize credit card rewards? If so, we want to congratulate you because you’ve come to the right place! Whether you’re looking to maximize cash back rewards or travel rewards, we have all of the tips you’ll need to hack as much value as possible from your cards.
Maximizing Cash Back Rewards Credit Cards
The easiest way to maximize your cash back rewards is by signing up for a new cash back credit card. There are many cards that will give you a sweet bonus in exchange for spending a minimum amount in the first few months. These bonuses usually come in the form of a statement credit and/or a bonus cash back earn rate.
For example, the AMEX Blue Cash Prefered often offers a $200 statement credit if you spend $1,000 on the card in the first three months. This more than offsets the annual fee of $95, and you also earn cash back on that $1,000 spend.
One of our staff members signed up for a credit card last year that provided 5% cash back on all spend in the first six months – with 5% cash back capped at $600 worth of rewards. After six months or $600 in cash back the card returns to its normal earn rate.
It just so happened that this staff member had his wedding that year and put all of his wedding spend on this credit card. He got a cool $1,274 in cash back on money he was going to spend anyways. How awesome is that!?
If you have a big event coming up that requires a lot of spend ($5,000+), then looking for a sign-up bonus structured with a bonus cash back earn rate is likely your best route.
The only downside about signing up for a new credit card is that your credit score may take a hit. However, if you don’t need to get approved for a loan or mortgage within three months, then the slight dip in credit score won’t matter much as it will quickly recover.
Strategic Category Spend
It is crucial that you understand your spending patterns. For example, if you’re a big spender on groceries then you should look for a card with a high cash back rate in this category.
Using the AMEX Blue Cash Preferred card as an example again, this card offers 6% cash back at grocery stores, 3% cash back at gas stations, an 1% cash back on all other spend.
It might even make sense to carry multiple cash back cards that have high cash back bonuses in different categories.
Maximizing Travel Rewards Credit Cards
Similar to cash back credit cards, the best way to jump-start your travel rewards is to sign up for a new travel rewards card. The best welcome bonuses are always reserved for new customers. The bonuses for travel rewards credit cards usually come in the form of straight up rewards points. For example, the Chase Sapphire Reserve can offer around 50,000 points after spending $4,000 in the first three months of card ownership.
With rewards points, it’s a bit more difficult to pinpoint how much each point is worth. A Chase Ultimate Rewards point can be redeemed for travel charges at 1.25 cents per point, or you can transfer these points to partner rewards programs that can boost your point value to over 2.0 cents per point
To make it simple, we compiled a list of point valuations to help you determine how much reward points from various programs are worth. For the latest reward points values, check out our homepage.
Again, please keep impacts to your credit score in mind when signing up for a new card!
Targeted Travel Channel and Categories
With travel rewards credit cards, they usually offer bonus point earn rates if you book travel through their preferred travel channel. As an example, the AMEX Platinum gives you five American Express Membership Rewards points for every dollar spent through AMEX Travel. This is an incredible bonus given that everyday spend only gets you one Membership Rewards point per dollar.
Many travel rewards cards also provide bonus earn rates on certain categories. A great example of this is the Citi Prestige that gives you five Citi ThankYou points for every dollar spent at restaurants – versus everyday spend that only gives you one ThankYou point per dollar.
You’ll need to understand your spending patterns to find the best travel credit card for you based on how much you spend in the available bonus categories!
Many travel credit cards come with credits that you can use towards certain purchases such as airplane baggage fees or hotel stays. Two great examples are the Hilton Honors AMEX Aspire and the Citi AAdvantage Executive.
The Hilton Honors AMEX Aspire gives the cardholder a $250 Hilton resort credit every single year. Also, when you book at least two nights using your AMEX Aspire, you will get up to a $100 credit. This credit is applied in a pretty interesting way. For every qualifying dollar you spend at a Hilton hotel, you will get one dollar’s worth of hotel credits that will be applied to your total bill at checkout. The “qualifying dollar” definition is generously broad, and includes everything except for property fees, taxes, gratuities, and the cost of the room itself
The Citi AAdvantage Executive gives the cardholder and eight guests (yes 8) a free checked bag when flying with American Airlines! This will save each person at least $25 – which really adds up when you travel in a large group.
All you have to do is make sure the travel credit card you sign up for has credits that you can consistently redeem every year.
Targeted Special Offers
From time to time, your credit card company may select you for a special offer. The frequency really depends on what card you have. For example, our AMEX Platinum gives us at least three special offers a year, while our Citi Prestige only gave us one last year.
The special offers can range from a statement credit for spending in a certain category, or VIP invites to exclusive events. The latest targeted special offer from our AMEX Platinum card gave us a $300 statement credit for spending $900 through AMEX Travel – essentially discounting our purchase by 33%
Maximizing Additional Credit Card Perks
This is a benefit that is severely underutilized with credit cards. Most cards with an annual fee, whether they are cash back or travel rewards credit cards, will have this feature.
When you buy something with a credit card that has this feature you will be protected from theft, damage (even accidental), and loss of the item. Buyer’s protection will usually protect your items for 90-120 days after purchase.
We have used this feature whenever our staff accidentally damages items that are under buyer protection coverage. American Express typically offers the best service in this category as you can make claims online, and get your money back fairly quickly. Other banks such as Chase and Citi offer decent service as well, but they are usually more strict and require more documentation when compared with AMEX
We love concierge services such as the ones from Visa Infinite and AMEX Platinum. They allow us to offload a lot of tasks like making appointments, researching gifts, and securing access to exclusive events such as sold-out concerts.
The Visa Infinite Concierge is really good at helping with travel planning, but mediocre at access to exclusive events. The AMEX Platinum Concierge usually has way more access to exclusive events, but unfortunately passes off travel planning to AMEX travel – who are terrible when compared with Visa Infinite travel planning.
Do you have any additional tips for maximizing credit card rewards? If so, then please let us know in the comment section below!