The following article is a guest post, courtesy of Alban. Please see his author bio at the end of the article.
There are always going to be warnings about spending on your credit card just to get the reward points, however, if you’re smart about collecting points and responsible in paying off your credit card balance within the interest free days, then there is no reason you can’t have the cake of a convenient and safe credit card, and eat it too by enjoying the rewards. Therefore, here are five ways you may be able to maximise the points you earn on your credit card.
1. Know how your card earn rewards
The more you know about how your credit card provider calculates and awards their reward points, the easier it will be to take advantage of the rewards program and collect the maximum points. For example, do your points expire? If so, knowing when and under what circumstances your points expire will allow you to cash in those points before they expire, and maximise the rewards you get from your credit card.
Also, do you have a companion card which earns double points? Come banks will provide you with an ordinary Visa or MasterCard, as well as a companion card which earns more points, an American Express for example. Your companion card is linked to the same account and accumulates just one credit balance with one monthly repayment, but where American Express is accepted, you can earn two points for every dollar, where if you used just your Visa or MasterCard you’d probably only earn one point for each dollar.
2. Know where to use your card
Some credit cards run affiliate programs which allow you to earn bonus rewards points when you shop at certain stores, or when you shop at the provider’s own online store. Usually a credit card provider’s online store offers products from stores they are partnered with and as an incentive to shop online and choose their partners’ products, your credit card provider may offer between five and 20 per cent in cash back rewards.
If you are still in the process of choosing a credit card with a rewards program, keep in mind that many providers are partnered with different stores and outlets, so look for a card which is partnered with stores you already shop at regularly, so you don’t have to make drastic changes to your shopping routines, but you can still take advantage of partnered promotions.
3. All work for more play
If you own a business you may be eligible to open a business credit card and corporate cards often offer better rewards programs and more point earning opportunities. For example, the Discover Business Card will give you a five per cent cash back on all office supplies and if you make sure to always use your business credit card to make those stationery purchases then you can maximise the rewards of your credit card program.
4. Take advantage of signing bonuses
When you are choosing a rewards credit card, compare the introductory offers, as many credit cards will offer bonus points or a cash back offer for new customers. An introductory offer may be a $50 or $100 cash back on your first purchase, or you may be able to give your points a boost with a rewards credit card which offers thousands of bonus points after you make your first purchase with the card.
Also make sure to stay informed of ongoing offers on your current reward credit cards as these may include bonus points if you make three purchases in the next month. If you know when and where the bonus points are offered, you can make sure you are there to collect on them.
5 Use your credit card every day
The easiest way to collect points on your credit card is to use it as much as possible. Therefore, why not set up a separate savings account where your wages are deposited each month so they can earn interest, while you make all of your everyday purchases on your credit card. At the end of the month, and before the end of your credit card’s interest free period, you can transfer the amount you need from your wages in your savings account to pay off your credit card.
As a result you are able to use your credit card for groceries, rent, your mortgage, bills and fuel – even incidental purchases can add up in a month and help you maximise your rewards points. To make sure your credit card is getting the maximum workout, link it to an additional card holder and have your partner use the card for their everyday purchases too. The cards are accessing the same credit account, but they are accumulating rewards points twice as fast.
If you can responsibly repay your credit card balance to avoid paying interest, then you can reap genuine rewards if you know how to maximise the points you earn on your credit card.
Author Bio:
Alban is a personal finance writer, he helps people to compare and choose the best credit cards online.
{ 6 comments… read them below or add one }
sweet! thanks for this ideas, but i hope i won’t get addicted on shopping by using my cards.
this is nice, i don’t use my credit card, but i may consider using it now.
Alright on #5! Glad to see promotion of responsible CC usage.
#2 is very important. If you have a tiered setup, you could be earning 3% on gas, but only a paltry 0.5% on everything else.
I only use the ones with cash back options, and I only redeem my points with cash back.
I may consider using it for an airline ticket if needed,but besides that, I have enough crap lying around my house that I never use.
That’s about what I think of their so-called “rewards”.
Just show me the money!
Good ideas. We just converted some of our credit card points towards paying our balance this month. I have some friends who didn’t even know they had this benefit. It’s so important to know what’s out there.
re: “5 Use your credit card every day”
This is a very interesting idea. I had never considered depositing my paycheck into an interest-bearing savings account. I’ll have to get my budget in a little better shape before I can try it out, but it is an intriguing idea.