“Credit cards are a great financial tool”. If you have heard this being said once, you’ve heard it a thousand times. But it bears being repeated since it’s true.
Credit cards are a great financial tool, but only when used wisely. This includes paying your bills in full and on time and actually maximising and utilising your rewards.
While most people do pay their bills on time, most are also unaware of the rewards they earn on their card. Still others are unaware of how to maximise their earning potential so they can make the best use of the rewards they earn.
Until now, that is.
Here are 5 ways you can maximise your credit card rewards: Get a Card That Matches Your Spending Pattern
Credit cards come with different tiers of rewards. The highest rewards are offered for a certain category of spending while all other categories earn minimal rewards. For instance, let’s say that you have the SBI Prime Card. This card gives you 20 Reward Points for utility bill payments and 10 Reward Points for dining transactions. All other spendings will get you only 2 Reward Points per Rs.100.
If you are looking to maximise your earnings, you should ideally use this card for utility bill payments and dining. However, if you use it for online shopping, you will only earn the base SBI credit card reward points. Which means that you are losing out.
Always make sure that your credit card’s rewards match your spending pattern as much as you can. This will help you earn more points faster.
Look for a Good Sign-Up Bonus
Banks want you to apply for a credit card issued by them rather than one issued by their competitor. In order to ensure that you apply for their card, they offer welcome and sign-up bonuses. This is an excellent way to earn points at an accelerated pace.
In fact, if you are looking for an air miles credit card or you plan to use your rewards points for travel, you should consider looking for a good sign-up bonus. This will ensure that you start your rewards points journey with a substantial number of points in your kitty.
Keep Track of Caps and Limits on Rewards
While card issuers will advertise how you can earn an X number of points per Rs.100, what they don’t advertise (but instead mention in their terms and conditions) is that most rewards come with a cap or a limit. This cap could be on the number of points you can earn per statement month or annually.
To maximise points, always know when your points have reached the cap. Any spending beyond this point will mean that you will only earn the base reward rate, which in turn means that you are losing out.
A good rule of thumb is to switch to a different credit card once you reach the points cap. Alternatively, you can consider using the card the following statement month instead (this works if your points limit is reset every statement month).
Pay Your Bills in Full and on Time
The thing with rewards is that you earn them only if you pay your bills in full and on time. So, even if you follow the steps mentioned above, but do not pay your bills on time (and in full), you end up losing out on rewards.
Use Your Rewards
The final piece of advice when it comes to your reward points is to use them. Many people are unaware of the number of points they currently have and when they expire. This means that you don’t even get any of the benefits that come with your card. It completely eliminates the point of using your card.
It is essential that you redeem your points or miles. You can do so by redeeming them for travel, lifestyle, entertainment, retails, and dining vouchers. You could get a free flight ticket or even a gadget of your choice.
All of this without having to spend more. So, use your rewards.
Even if you are earning cashback, make sure that you use it to offset your bills or use them as per the terms and conditions of the bank.
These are just simple ways by which you can maximise your credit card rewards and not even break a sweat. So, go ahead and use that credit card the way it should be.