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Maximizing your credit card rewards

Written by Barry Choi

Monday, April 18th, 2016

Although there's no formal data available, it's safe to say credit card rewards have changed the way we spend. With incentives in place, many of us are electing to put more of our purchases on plastic. We can even maximize our reward earning potential by following a few simple tips.

Picking the right card

Every rewards credit card is different, so try to pick one that aligns with your interests. If you have a thirst for adventure, then a travel rewards credit card may be of interest. However, if you prefer to keep things simple, a cash back or store credit card is probably a better fit.

Keep in mind that for a rewards program to really be rewarding, you need to actually use it. A gas station branded credit card is of no benefit to people who don't drive, nor is an airline loyalty program to people with a fear of flying.

Signup bonuses

Most credit cards offer incredible signup bonuses which can be worth a few hundred dollars depending on the rewards program. Watch for a catch, however. You may need to spend a certain amount on your credit card within a set period of time to qualify for the bonus.

Use a single card

Using multiple cards may have served a purpose in the past, but if the goal is to maximize your rewards, then it makes sense to stick to a single card when making purchases. That doesn't mean you need to cancel your old cards, but if one of them charges an annual fee and you're no longer using it, then it's worth considering dropping it.

Depending on the credit card provider, you may be able to add authorized users for free or for a small fee. This will give additional people their own credit card which links to your account, but all points earned are pooled. Although the authorized user is given their own card, purchases are not the responsibility of the authorized user, only the primary cardholder.

Look for multipliers

Many rewards programs will offer increased points or cash back depending on where you're swiping your card. These bonuses are usually earned by spending in specific categories such as restaurants, gas, and groceries, so it's good to be aware of where you can earn additional points.

You can earn additional points by shopping at merchants who are partnered with the same loyalty program. By using your loyalty card and then paying for your purchases on your credit card, you can earn double the points.

Know the rewards program

Understanding multipliers is one thing, but it's just as important to know your rewards program inside out. Some programs offer additional points—or require less points—when you book or claim rewards through their own site. Studying the redemption requirements will help you figure out what gives you maximum value.

There are also some potential negatives with rewards programs. Some programs have an expiry date on points after 12–24 months if there's no activity. To keep your account active, you'd have to continue to accumulate points or make a claim. There's also the possibility of your points being devalued or additional points being required to make a claim. Advance notice would be given, but since these changes could happen at any time, it's no surprise that some people prefer a cash back card instead.

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