5 Proven Strategies To Get the Most Out of Your Credit Card Points
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Written by
Harrison Pierce
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Edited by
Amen Oyiboke-Osifo
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Reviewed by
Jasmin Baron
Credit cards can be extremely rewarding. When you use them properly, rewards credit cards can unlock exclusive experiences, once-in-a-lifetime vacations, first-class flights around the world and more. If you’re new to credit card rewards, here’s everything to know about getting the most out of your points.
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Earn a Welcome Bonus
Before focusing on getting the most value from your points, you first need to earn them. A great way to do this is by earning a welcome bonus, which most rewards cards offer to new cardholders after spending a certain amount of money in a specific time frame.
Before applying for a new credit card, you should take a look at the welcome bonus offer to ensure you’ll be able to meet the spending requirement. The last thing you want to do is leave money on the table by not spending enough to reach the bonus. Only spend what you can afford — you don’t want to accrue interest on your spending just because you’re trying to reach a spending threshold. The interest will cut into your earnings and create unnecessary stress.
If you know a big purchase is coming up, such as a new laptop for school, furniture for an apartment or wedding expenses, this can be a great time to apply for a new card and earn a welcome bonus.
Use Your Card for Day-To-Day Purchases
You should use your card for almost every purchase you make, except at ATMs or places that charge fees for using a credit card. By putting your everyday expenses on a credit card, you’re earning valuable points, miles, or cash-back rewards without increasing your spending. Some cards have rotating bonus categories, where you can earn bonus points on select purchases during certain months of the year. Other cards will earn the same amount on purchases throughout the year.
Be sure to review your program’s terms and conditions to understand how to maximize your credit card rewards. Regardless of the type of card you have, strive to pay off your balance in full each statement period to avoid interest charges.
If you tend to do a lot of online shopping, you should also look at your issuer’s shopping portal to see if there are any cardholder offers. Oftentimes, you can get bonus points on purchases with select merchants simply by enrolling in the offer and using your card at checkout.
Focus on Transferable Point Currencies
Once you have enough points, you’re ready to start redeeming them for maximum value. Most major credit card issuers offer cards that earn a transferable points currency. This means that you can convert your rewards to hotel points and airline miles with the issuer’s travel partners.
When you transfer your points to partners, you can receive outsized value compared with travel portals or statement credits, which typically offer a fixed value of 1 to 1.5 cents per point. Transferring your points to travel partners allows you to book hotel stays or flights for significantly more value, sometimes as much as 3 or 4 cents per point.
It can take some time to learn the ins and outs of transfer partners, so don’t worry about finding the perfect redemption. Instead, pay attention to things like limited-time transfer bonuses or award travel sales with your preferred airline.
Take Advantage of Lesser-Known Perks
Apart from the opportunity to earn rewards, there are often lesser-known credit card perks available to you. These benefits will vary by card, so you’ll have to do some research. Your card may offer money-saving perks, like travel insurance or rental car coverage. Or, it may provide travel-related perks like airport lounge access, a reimbursement of the application fee for TSA PreCheck or a flexible travel credit.
Some cards will even include a DoorDash DashPass or Uber One membership or statement credits for purchases. These types of benefits typically don’t roll over from month to month, so if you don’t use them, you’re not getting the most value from your card.
Be Cautious When Redeeming Your Points
There are typically several ways to redeem your points and miles. These methods are not created equal, so it’s essential to exercise caution before completing a redemption. For instance, just because you can buy gift cards with your points doesn’t mean you should. While it’s certainly enticing to receive cash, it’s also usually a pretty wasteful redemption.
Let’s say you buy an Amazon gift card with your points at a valuation of 0.7 cents per point. That means you can get a $70 gift card for 10,000 points. For the same amount of points, you might be able to book a night at a hotel worth $100 through the travel portal. Or you could leverage transfer partners and book a $250 flight. While the Amazon gift card might be the easiest option, you’re receiving much less value than with other redemption methods.
Bottom Line
The best rewards credit cards allow you to earn points on your day-to-day purchases and then redeem those points in a variety of ways. If you want to maximize your points, take advantage of transfer partners and other cardholder benefits. If you’re paying an annual fee, you should squeeze every single benefit you can out of the card to justify the cost. If you aren’t, consider switching to a no-annual-fee card or one that more closely aligns with your spending habits and travel goals.
