Maximizing Your Credit Card Rewards: A Comprehensive Guide

At O1ne Mortgage, we understand the importance of making the most out of your financial tools, including credit cards. Credit card rewards can be a fantastic way to earn cash back, points, or miles on your everyday purchases. However, managing multiple rewards credit cards can be challenging. Here, we provide a detailed guide to help you optimize your credit card rewards and stay organized.

Understand How Your Cards’ Rewards Programs Work

Before diving into the world of rewards credit cards, it’s crucial to understand the different attributes of these cards:

Rewards Currency

First, determine whether the card offers cash back, points, or miles. Some cash back cards may offer flexible points with various redemption options. If the card offers points or miles, check if you’re earning rewards with the card issuer or a co-branded partner, such as an airline or hotel chain.

Rewards Rates

Credit cards may offer flat-rate, tiered, or rotating rewards rates. You might need to select categories for bonus rewards or activate your eligibility for them. Be aware of any limits on how much you can earn in bonus rewards.

Redemption Options

Understand how you can redeem your rewards. Travel credit cards often offer more flexible redemption options than airline and hotel loyalty programs. The value of your rewards can vary based on how you redeem them, and some issuers allow you to transfer points to other programs. Cash back options can include paper checks, direct deposits, or statement credits.

Card Benefits

In addition to rewards, your cards may offer various benefits. Avoid getting cards with overlapping benefits and keep track of the perks each card offers to maximize their use.

Compatibility vs. Diversification

If you want to accumulate rewards with one program, consider getting multiple cards that offer points or miles for that program. However, diversifying your rewards across different programs can be beneficial, especially since loyalty programs can devalue over time. For example, you could have one card for airline miles, another for hotel points, and a third for cash back to cover various travel-related costs.

Decide Which Card You’ll Use for Each Type of Purchase

Using multiple rewards credit cards for different purchases can maximize your rewards. For instance, one card may offer high rewards on groceries, while another offers better rewards on gas, dining out, and other expenses. Be aware of the base rewards rate on non-bonus spending and consider a card with a high flat rewards rate for those expenses.

Remember that card issuers and you may have different opinions on spending categories. For example, grocery rewards typically don’t apply to purchases at convenience stores, superstores, or wholesale clubs. Knowing what your card includes in its rewards categories can help you decide when to use each card.

Set Alerts for Your Bill Due Dates

Managing multiple credit cards can make it challenging to keep track of due dates. If possible, set all due dates to the same day. If not, set up alerts to avoid missing payments. Consider automatic payments if your income is predictable and you have a buffer in your payment account to avoid overdraft fees.

Keep Track of Your Transactions

Regularly checking your credit card accounts can help you understand your spending and avoid overspending. It can also help you spot unauthorized transactions. While logging into each account individually can be time-consuming, budgeting apps can import transactions from all your financial accounts into one place, making it easier to track your expenses.

Keep Track of All Your Cards

If you have several credit cards, it might not make sense to carry all of them daily. Keep your physical cards in a safe place to avoid loss or theft. When shopping online, avoid saving your card information on websites you don’t shop with regularly to reduce the risk of data breaches.

Don’t Forget About the Annual Fees

Using multiple rewards cards can add value to your spending and lifestyle, but it can get costly if you have multiple annual fees. If you’re getting enough value from each card to cover the annual fee, it can be worth it. However, if you’re not using some cards as much, it may not make sense to continue paying the annual fee.

Check Your Credit Before Applying for Another Rewards Card

Before adding another rewards credit card to your wallet, consider getting a free credit report and score to evaluate your approval odds. Most of the best rewards credit cards require good or excellent credit, generally starting at a FICO® Score of 670.

At O1ne Mortgage, we are committed to helping you make the best financial decisions. If you have any questions or need assistance with your mortgage needs, call us at 213-732-3074. Our team of experts is here to help you navigate the complexities of credit cards and mortgages, ensuring you get the most out of your financial tools.

For more information on popular rewards credit cards, check out our card comparison tool, which can pair you with specialized card offers based on your credit profile. Let O1ne Mortgage be your trusted partner in achieving your financial goals.