Using a credit card has many advantages. Beyond convenience, you can earn credit card rewards such as cashback or miles points. If you prefer perks for travel, a travel rewards credit card is best for you.
Paying through cash or a debit card only leads you to spend money without getting anything in return. However, using a credit card on your purchases will earn you valuable points and miles for your next travel. Moreover, you can get access to purchase protection and travel insurance, among others.
Knowing all the details of your rewards credit card is essential for you to get the most out of its benefits. But, of course, it comes with a responsible spending habit. Check out the tips you must follow to manage your credit card responsibly while enjoying its benefits.
Learn About Sign-Up Bonuses and Minimum Spending Amounts
First-time users are eligible to get sign-up bonuses, also called welcome bonuses. These bonuses are a quick way to earn a lot of points or miles. To earn the bonus, there is a required minimum spend that varies depending on the card you have.
An example of a card with a very high welcome bonus is the Ink Business Preferred Credit Card. They offer 100,000 bonus points for a minimum purchase of $15,000 in the first three months from the day you opened an account.
If you redeem the bonus through Chase Ultimate Rewards, you will receive $1,250 for travel. An example of a card that has a low minimum spending requirement is the Citi Rewards+ Card.
You can get 15,000 bonus points for at least $1,000 worth of purchases using your card within three months of opening a credit card account. The points are redeemable for gift cards worth $150 at thankyou.com.
Monitor the Annual Fees
A credit card annual fee is automatically charged by the provider to your account to keep the card account open. Some cards waive that fee for the first year.
It is important to keep track of the annual value of your points to ensure that you are not spending more money to keep your card open than getting in return.
You can easily earn points or miles on all your regular expenses such as dining, groceries, phone bills, and more. You can maximize your credit card rewards by charging all your purchases to your credit card.
Rewards cards offer a certain number of points or miles on every dollar spent. So, pick a card that closely matches your spending habits, and the rewards will increase in no time.
The more you charge, the greater your rewards and it means using a credit card for spending that you are already doing regularly anyway.
Find a credit card that fits your budget. Know how much balance you can afford to pay off in full every month. That is the total maximum you should ever spend on your card because the goal of using it is to create more value than you spend.
Learn How Interest Charges Affect Your Balance
Interest charges are payments you make to maintain a balance on your card but they are the least effective payment.
They just result in you paying a minimum amount and don’t help in getting rid of debt.
To avoid these charges, pay off your purchases immediately. If you fail to pay off the balance every month, the interest you pay cut back the rewards you earned.
Use Online Shopping Portals
Online shopping is getting popular these days because it is fast, easy, and convenient. You can earn credit card rewards in just a few clicks on your smartphone or laptop.
Watch out for promos and discounts advertised online by various credit card providers.
Booking directly with an airline or hotel can earn travel rewards or miles points that translate into free flights and hotel stays. Every time you fly with any given airline, you will receive miles points.
You will also get them while staying a day or two in a participating hotel property in hotel points. Take note to sign up for their loyalty program first.
American Express has many credit cards to choose from with great rewards programs and transfer partners, such as Delta, JetBlue, and Marriott.
Chase is a popular credit card provider that offers great cards. They have points-earning cards that allow you to transfer points to hotel and airline partners such as British Airways, United, Hyatt, and Marriott.
Remember that a credit card is not free money. You will pay a penalty APR among other fees if you don’t pay your bills on time. In terms of rewards cards, the more you spend, the more rewards you get.
But they simply aren’t worth it if you are paying more in penalty fees than earning in points.