How to Maximize Credit Card Rewards
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Written by
Rafaela Stålbalk Klose
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Edited by
Emily Gadd
Imagine earning something extra every time you swipe your credit card — whether it’s cash back, points toward your next vacation or discounts on everyday purchases. That’s the allure of rewards credit cards.
These perks can turn your regular spending into opportunities for savings or special treats, and make every purchase feel like it’s working harder for you.
But maximizing credit card rewards isn’t always as simple as it looks. Unlocking the most value from your credit card requires financial discipline, knowledge of loyalty programs and a knack for navigating the fine print.
1. Pick (and Use) the Right Card for Your Spending Habits
The first step in maximizing credit card rewards is selecting the right card and using it responsibly for all purchases — that is, spending only what you can afford to pay back each month. Choosing the best credit cards for categories that align with where you spend the most, whether that’s travel, dining, groceries or gas, can ensure you get the most rewards from every purchase.
For instance, it makes sense for frequent travelers to opt for a travel credit card that offers extra points, miles or cash back on travel expenses and dining. Those who spend significantly on groceries and gas and want to save money might consider a cash-back credit card with higher rewards in those categories. Or, if your everyday spending doesn’t usually line up with typical credit card bonus categories, a card that earns generous flat-rate rewards on all purchases, like a 2% cash back credit card, could be the right pick.
2. Take Advantage of Welcome Bonuses
Many credit cards offer big welcome bonuses that can earn you hundreds of dollars in rewards if you meet a minimum spending requirement in the first few months.
For example, the Capital One Venture Rewards Credit Card ($95 annual fee) comes with a substantial welcome offer: Enjoy a one-time bonus of 75,000 miles once you spend $4,000 on purchases within 3 months from account opening, equal to $750 in travel.
Or, if you prefer cash rewards, the $0-annual-fee Wells Fargo Active Cash® Card has a welcome offer that’s even easier to unlock: Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months.
Check the terms of your card carefully and plan your spending accordingly. Timing the opening of a new credit card with larger, necessary purchases you’ve planned is a good way to knock out the requirement without overspending.
3. Use Cards With Rotating Categories
Some credit cards offer a higher rate of cash back in specific categories, such as groceries or entertainment, that change every quarter. For example, one of the best rotating category credit cards, the Discover it® Cash Back, earns 5% cash back on up to $1,500 spent each quarter (then 1%) in rotating categories once you activate the bonus.
Similarly, the Chase Freedom Flex® earns 5% cash back on up to $1,500 in combined purchases (then 1%) within each quarter’s categories after activation.
To make the most of these rotating rewards, you’ll have to remember to activate the new categories each time they change. Keeping an eye on the rewards calendar to plan your spending can help you take full advantage of the higher cash back in those areas.
4. Combine Points Across Cards
Some banks issue a variety of cards that earn points in the same rewards program. For example, the Chase Sapphire Preferred® Card, Chase Sapphire Reserve® and Chase Freedom Unlimited® earn Chase Ultimate Rewards® points, which you can combine across your accounts.
Combining points allows you to take advantage of higher redemption values or extra perks that might be associated with a particular card. In the case of Ultimate Rewards, for instance, moving Chase points from the Freedom Unlimited to the Sapphire Reserve or Sapphire Preferred Card allows you to transfer them to airline and hotel partners and unlock higher rates on redemptions through Chase Travel℠.
In some cases, you may be able to combine rewards with a family member’s account, which could help you book an award you might not otherwise have been able to afford.
5. Redeem for Maximum Value
The value of credit card rewards often depends on how you redeem them. Typically, you’ll get a fixed rate for redemptions such as cash back or gift cards, but some credit card issuers have partnerships with hotel and airline loyalty programs. Transferring rewards to these partners can get you a higher value for your rewards if you’re strategic about how you use them.
Maximizing rewards in this way takes a bit of work because you’ll have to learn about and compare partner loyalty program award charts. But it’s worth the effort if you’re able to book high-value award flights and hotel stays.
You should also compare other redemption options, such as using points to book travel through the issuer’s travel portal. Sometimes you can get a higher value from your rewards when you use them this way.
6. Pay Off Your Balance in Full Each Month
To make the most of credit card rewards, paying off your balance in full every month is essential. If you carry a balance, you’ll get stung with high interest charges (unless you’re using a card with an introductory low APR). Even if you use a rewards credit card for all of your purchases, interest charges from carrying a balance will quickly wipe out the value of your earnings.
Carrying balances on your credit cards can also harm your credit score.
7. Use Your Card’s Benefits
Many credit cards come loaded with perks that can save you money, protect your purchases or even make your travels more comfortable. Some also offer limited-time deals that provide extra rewards points or cash back at certain retailers.
It’s worth learning about these benefits to squeeze the most value from your credit card, particularly if it charges an annual fee. For example, if you plan to buy a big-ticket item, using a card with purchase protection and/or extended warranty benefits can give you additional coverage in case of mishaps.
Similarly, a credit card with travel insurance could reimburse you for unexpected road bumps, such as flight delays, lost baggage or a trip interruption. And credit card car rental insurance could save you hundreds or thousands of dollars if you get into a fender bender with your rental vehicle.
8. Pay Attention to the Fine Print
Understanding your credit card’s rules and restrictions can help you make the most of your rewards. For example, a card might advertise earning bonus rewards on travel, but what counts as travel with different issuers can vary greatly.
Some cards also have spending caps in bonus categories. For example, the Blue Cash Preferred® Card from American Express (an advertising partner) earns 6% cash back at U.S. supermarkets on up to $6,000 spent per year. After that, the cash-back rate drops to just 1%.
Additionally, keep an eye on your credit card rewards to ensure they do not expire, because in some programs, you’ll lose your points or miles if your account is inactive for a specified period.
9. Redeem Your Rewards
Credit card rewards have no value if they’re just sitting idly in your account. Your rewards aren’t an investment — in fact, loyalty programs sometimes devalue their rewards over time, making them worth less than before.
So redeem your rewards in whatever way makes sense for you. Again, you’ll often get the highest value from travel redemptions, but there’s nothing wrong with trading in points for cash back or gift cards if it saves you money and makes your life easier.
The information related to Chase Freedom Flex® and Chase Sapphire Reserve® was collected by CardCritics™ and has not been reviewed or provided by the issuer of this product/card. Product details may vary. Please see issuer website for current information. CardCritics™ does not receive a commission for these products.
Frequently Asked Questions About Maximizing Credit Card Rewards
Is maximizing credit card rewards worth it?
Yes, maximizing credit card rewards can be worth it as long as you can pay off your credit card in full every month. Earning rewards on your everyday spending can save you money or unlock vacations and other treats you might not otherwise get to enjoy.
How can I increase my credit card reward points?
You can boost your credit card rewards points by using a card that fits your spending, paying off the balance monthly and taking advantage of card bonuses and promotions.
How can I maximize cash back on a credit card?
To maximize credit card cash back, choose a card with high rewards rates in areas where you already spend a lot of money, and pay off the balance monthly to avoid interest.
How do I maximize the use of a credit card?
You can maximize your credit card by picking and using a card that earns bonus rewards in categories that match your spending, paying off your balance in full each month, taking advantage of card benefits, and using rewards for high-value redemptions like travel.
