5 Important Tips for Using Your Rewards Cards

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5 Important Tips for Using Your Rewards Cards

After you find the perfect rewards credit card for you, there's still work to be done. Using your new card effectively can help you earn the most rewards points or cash back. Check out a few pointers on how you could put that rewards card to better use.

Pay Off Your Balance Each Month

Interest payments make the credit card world go 'round. This is especially true in the case of rewards cards, which almost always come with elevated interest rates. Once you start carrying a balance on these, you're essentially negating the benefits you've stacked up. So if you're looking to get the most out of your rewards card, make sure you're all set to pay on time.

Read the Terms Carefully

One key step to getting the most out of your rewards cards is checking all the fine print that comes along with them. Make sure you understand exactly how you will accrue points and miles, and what steps you have to take to redeem those benefits. Some cards may require you to opt into rewards programs before you can earn, so stay on top of requirements like these so that you don't lose out on any of the rewards that could be coming your way.

Redeem Rewards Regularly

A whole lot of miles, points and other rewards go unclaimed every year. Rewards could go to waste because cardholders don't understand how to redeem their points or because they simply forget to take action before those points or rewards expire. Most rewards will disappear after a certain point, so it's best to stay aware of that date before it sneaks up on you.

It's generally advisable to redeem your rewards regularly. In addition to expiration dates, many consumers don't realize that the value of the points and miles that they earn may decrease over time, so that what they think they've earned might end up being worth significantly less. For this reason, it often makes sense to redeem these rewards sooner rather than later. By promptly cashing in, you can make sure you're getting the benefits that you thought you'd be getting when you did all that spending in the first place.

Keep Track of Seasonal Changes and Other Campaigns

Many rewards or cash back credit cards will change their rewards rates or rewards availability based on the time of year or other campaigns. If certain types of spending are set to be more valuable during certain times of the year, you could stand to gain by adjusting your spending habits accordingly. If you have several rewards cards, it's a good idea to stay on top of what each card is offering at any given time, and choose which card to use accordingly.

Seasonal campaigns could include a greater emphasis on rewards for gas during the summer, for instance, or for specific retailers during the holiday season. Some cards may also adjust their benefits periodically without tying changes to specific seasons or holidays, so keep an eye out.

Monitor Your Spending

It's important to remember that these cards are meant to provide added benefits. Don't let the allure of points, miles or other rewards send you into spending overdrive. Collecting rewards or cash back probably won't help you much if you're going to exceed your budget to get them in the first place.

You can keep track of your credit card balances by connecting your credit cards to your Credit Karma account via our My Spending tool. There, you can track your spending from month to month, as well as see it broken out into specific spending categories. If you're collecting double your regular rewards for dining out, you might want to check out your restaurant spending to see that the promise of rewards isn't draining your bank account.

Bottom Line

If used effectively, earning rewards from your credit cards can feel like you're getting something for free. Collecting cash back or points on money you would have spent anyway can feel pretty good. If you have a rewards card or are looking to get one, keep these tips in mind to get the most out of your experience.

About the Author:Mike Goldstein is a Content Writer at Credit Karma. Since joining the team in June 2013, he's been delivering the financial know-how on the daily. When away from work, you can find Mike watching hockey, Twittering for hours and frequenting trivia nights.

Editorial Note: The opinions you read here come from our editorial team. While compensation may affect which companies we write about and products we review, our marketing partners don't review, approve or endorse our editorial content. Our content is accurate (to the best of our knowledge) when we initially post it, but we don't guarantee the accuracy or completeness of the information provided. You can visit the company's website to get complete details about a product. See an error in an article? Use this form to report it to our editorial team. For questions about your Credit Karma account, please submit a help request to our support team.

Advertiser Disclosure: We think it's important for you to understand how we make money. It's pretty simple, actually. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials.

Compensation may factor into how and where products appear on our platform (and in what order). But since we generally make money when you find an offer you like and get, we try to show you offers we think are a good match for you. That's why we provide features like your Approval Odds and savings estimates.

Of course, the offers on our platform don't represent all financial products out there, but our goal is to show you as many great options as we can.

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Very smart man!  I have 2 credit cards I use on a regular basis.  I pay the off weekly.  I quit using one for a year so they offered me $ 75 cash bonus if I charged a certain amount within a certain date.  I sign up for 5% cash back bonuses and take advantage of using a certain card for certain promotions to get even more bonuses.  The discipline most people seem to need to learn is to pay it off weekly or monthly.  I prefer cash back on one card because they don't offer any kind of bonus on buying gift cards.  When I use the other card I get gift cards that offer extra cash on the card.  I've eared about $ 900 - 1100 each of the last 3 years.  

I wish every young person would read your article, but it's never too late to learn!  Your advice is excellent and to the point!

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Reply by
CKCharmaine

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Hi cmc304, thanks for your kind words on the article! It sounds like you've found a system that pays off for you :)

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If you have a bunch of rewards cards and don't know which card to use at a certain store to get maximum rewards consider using the Wallaby app : https://www.walla.by/ . Came across this app recently and found it to be very useful.

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Helpful to 2 out of 2 people

My US Bank Cash+ Visa card allows me to choose two 5% categories and one 2% category every quarter.  Unlike other cards I've seen, one of the available 5% categories is charity.  So, I choose that, and up my donation by 5% (giving the 5% reward to the charity, more than covering the processing fee they pay for the donation).

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Reply by
cmc304

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I've never had to pay a fee to donate.  I simply check the box.

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Reply by
CKCharmaine

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That's super interesting -- thanks for sharing!

Reply by
Malvinb

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Hi cmc304, you don't pay the fee, the charity does, to the credit card company, as does anyone who accepts credit cards.  The fee varies by card, but, I think, is generally under 1%.  So the 5% increase more than covers that fee.

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I have an Amazon.com Chase card that gives 3% cash back on purchases from Amazon.com all year long.

I have a Chase Freedom card that gives 5% cash back on purchases from Amazon.com from Oct-Dec. 

My Amazon.com purchases will be charged to my Chase Freedom card until Dec. 31. Do these companies not "talk" to each other?

Reply by
cloud9ine

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I do the same thing. It is not even companies. It is the same company: Chase!

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Never too Late to learn. Thanks

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Reply by
CKCharmaine

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We feel the same way! Thanks for checking out our articles.

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