How to maximize your credit card rewards
Whether you’re getting travel freebies, no-cost gift cards to your favorite retailers or tax-free cash in the bank, it’s easy to understand why people love reaping the benefits of a rewards credit card.
When used wisely, rewards cards like the U.S. Bank Altitude Go Visa Credit Card can be a strategic asset in your household budget. We’ll help break down rewards cards, so you know how to make them work for you – and get the most out of those rewards.
The basic premise of a rewards card is simple. Use the card to make purchases, accumulate reward points and redeem those points for a reward you get to enjoy.
But the details of the rewards system can vary significantly from card to card. “Today, there’s a variety of rewards cards out on the market,” says Thomas Crowley, vice president of retail payment solutions at U.S. Bank. “The most popular is cash back credit cards.”
With a cash back card, the purchases you make translate directly into a dollar value. Your card may convert that reward into a credit on your next card statement or even direct deposit the cash you’ve earned into your checking account.
Crowley points out that the way you earn cash back usually fits into one of two systems:
In addition to cash back credit cards, travel rewards are extremely popular. You earn points or miles for your purchases and redeem those points for travel-related freebies, such as hotel stays or airfare. Similar to cash back cards, travel rewards cards may let you earn points on a flat-rate basis or using a tiered system.
“If you’re an avid traveler, travel benefits are typically attached to these cards, so you might get benefits like no foreign exchange fees, TSA pre-check reimbursement or annual travel credits,” Crowley says.
Some cards offer points as a reward for using it to make everyday purchases. The U.S. Bank Altitude Go Credit Card, for example, offers points on every single purchase, plus extra bonus points for certain types of transactions, like dining, groceries, streaming services and gas stations. Once accumulated, points can be redeemed for a variety of items including gift cards and cash back. To make adding up points easy, use the rewards calculator.
As an added benefit, the U.S. Bank Altitude card’s points don’t expire. When you consider your different options, read the fine print about which purchases are eligible for points and whether there’s an expiration date, as not all cards have the same policy.
Many credit cards give you options for cashing in rewards – these can include magazine and newspaper subscriptions, electronics, small appliances and even tickets to events. Some retailer-specific cards let you earn money-saving coupons, free shipping or early access to store deals. The possibilities are nearly endless.
Whichever type of card you choose, you’ll want to use it responsibly. When using your card consistently, the right rewards credit card can help you build your credit and earn extra perks over time. Keep these tips in mind for choosing the best cards and supersizing your rewards:
The benefits of a rewards credit card are clear, but when should you think twice before applying for one?
First and foremost, you want a rewards card to be an asset to your finances – not a liability. If you worry you’ll overspend simply to earn rewards, skip the card. “No matter what rewards you get back, they’re never going to outrun the amount of money you owe to the credit card for the purchases you’ve made,” Crowley says.
Second, watch out for higher-than-average interest rates. Most rewards cards come with higher rates than their non-rewards counterparts, shares Crowley. So, if you’re planning to transfer a balance or carry one from month to month, he recommends exploring non-rewards cards with low introductory or long-term interest rates as a better option.
Third, find out if your desired rewards card comes with an annual fee. Crowley points out, however, that a card with that fee might still be a good fit for your wallet. “Customers just want to make sure that they’re getting the right value exchange in return for the amount of annual fee they’re going to pay,” he says.
Finally, Crowley says, be aware of hurdles to redeeming your points. Some cards let you cash in any number of points, while others will require you to redeem rewards only in increments of $25. Know which system your card uses and whether its rules will work with your spending habits.