Make the Most of Credit Card Rewards With These Dos and Don’ts

Are credit card rewards all they're cracked up to be? While it's possible to reap the benefits of spending money on your card, making the wrong moves can quickly negate these gains. These are the dos and don'ts for maximizing your credit card rewards and avoiding common pitfalls.

Do Pick a Card That Makes Sense

Carefully read the terms and conditions of each rewards card you consider. After all, you don't want to end up with a travel-focused rewards card if you prefer to stay close to home. Pick rewards that make sense for your lifestyle. Better yet, seek a credit card that offers healthy cash-back rewards.

Once you master the art of optimizing your credit card rewards, think about choosing a second card. Some experts say mixing and matching rewards results in the most bang for your buck.

Don't Skip Swiping or Paying

Once you have a rewards card, the best way to max out its benefit is to use it for everything. Of course, there's another big don't to remember: Don't skip paying off your card in full each month either. If you can't afford it without a credit card, you can't afford it.


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Do Make a Spreadsheet

Many rewards cards have rotating categories. For example, you might get 5% back on groceries one month and on restaurant meals the next month. Keep track of the rewards and plan accordingly. It doesn't have to be a spreadsheet, but you'll need a system that works for you (especially if you have more than one rewards card).

You can also use this spreadsheet to compare rewards so you know which choice has the most benefit. Some cards offer higher percentage rates for cash back while others boost your earnings when you shop at certain brands. For best results, choose the reward that offers the highest amount in a category you can use. It doesn't matter that a card pays 10% back on pet supplies if you don't have a dog.

Don't Miss the Fine Print

Keep an eye out for terms that limit the usefulness of a rewards card. Some cards only pay rewards up to a certain amount, so keep that in mind when selecting a credit card based on these benefits.

The fine print isn't always bad news, though. For example, some credit cards offer member perks such as preferential airline status.

You should also understand what each reward category really means. For example, travel might cover tolls, train tickets and gas as well as hotels and airfare. Others might be more limited; the grocery category might not cover a wholesale club.

Don't forget to check the card's annual fee. You should be able to earn well above that amount in rewards to offset the cost of your credit card.

Do Take Advantage of Bonus Opportunities

Don't ignore the emails from your credit card company that offer chances to earn bonus points. Often, these involve double or triple points for using online shopping portals, completing surveys or referring friends to the rewards program.

Many rewards cards also give you points for purchases for authorized users. If you have kids headed to college, make them an authorized user on your account and give them a card for emergencies so you can earn money back for that late-night Lyft ride.

Don't Use Your Card for Non-Rewards Activity

Most rewards credit cards don't pay points for cash advances, balance transfers or similar actions. Don't use your card for those purposes; limit it to situations in which you're earning money back.

If you play the game, you can reap significant rewards from your credit cards. The biggest pitfall? Paying more in interest on your purchases than you earn in rewards. Keep spending in check to make the most of your credit card perks.

Can't qualify for a rewards card yet? Generally, you'll need a credit score of at least 700 to be eligible.

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