The continued growth in the number of credit card users is enough to show how more and more people are becoming dependent on credit cards. The credit limit is not the only reason why individuals want to have credit cards, but the reward points/cashback offers provided by the credit card companies attract them more. All the credit card issuers offer basic to super-premium credit cards with different exclusive reward point offers that the customers can avail by making purchases using their cards. Earning reward points through credit cards is easy and everyone can do that as you just need to make purchases. But, you might not be aware of how you can make the most out of your credit card rewards. Following are some of the strategies that can help you maximize your reward points and get the maximum benefit by using your credit card:
Choose The Right Credit Card
Almost every credit card rewards its customers on their purchases, but different cards can be the best suited in different categories. Some cards are best for shopping, some are for travel, and others can be best for fuel or something else. So, you should first understand the categories where you spend the most. Make a list of all your expenses or recall all your purchases made in the last month and note down the categories where you tend to spend the most always. After analyzing your spending habits, you must look for a card that will earn you the maximum benefit. If you spend most on online shopping, you should check for the best shopping credit cards, and if you are a frequent flyer, you should look for the best travel credit cards and so on. It is never a good idea to go with a travel card if you spend more on shopping.
Make Everyday Purchases Using Your Card
It is one of the popular credit card myths that credit cards should not be used to make everyday purchases. But, it is always a good idea to make all your purchases using your credit card, provided that you pay your bills on time and keep the credit utilization ratio in mind. Credit cards provide you extra points on selected categories, but it doesn’t mean that you don’t earn any reward on your other purchases. You get rewarded for almost everything you do using your credit card. So, instead of making daily purchases using cash, you should make those using a credit card to earn more & more reward points.
Keep Checking For The Limited Period Offers
Credit Card issuers keep coming up with exclusive offers and provide their customers with an opportunity to earn maximum benefit. These offers are generally valid for a limited period and reward you on the basis of your spends during the offer period. You should keep yourself updated on these offers so that you can earn the maximum benefit. You can follow your card issuer’s official website or social media page for the same. You can also subscribe to Cardinsider’s newsletter to get updates of all the credit card offers as soon as they are launched. But, it is also essential not to get prompted by these offers. Some people overspend just to achieve a minimum threshold to get the benefit of an offer, but it is not a good idea. You should spend only what you can afford to pay later and not more than that.
Redeem Your Reward Points Wisely
Some card issuers allow you to redeem your earned reward points against anything you want whereas others give you only a few options. You should check for all the categories where you can redeem your points and then go for the one that seems to be the most beneficial to you. For example, if your card issuer is allowing you to redeem your points against shopping at a value of 1 RP = Re. 0.25 and against statement cash at a value of 1 RP = Re. 0.50, then you should redeem your points against your statement cash as the value of 1 RP is greater for this particular category. So, this is how you can redeem your reward points wisely to get the maximum benefit. One more thing to check regularly is the expiry date of your earned reward points. Most of the reward points you earn don’t last forever but expire after some months/years. So, you should make sure to redeem them before they expire.
Try To Pay Your Balance in Full Each Month
Earning reward points will be fully beneficial only if you pay your full outstanding every month. It is because when you don’t pay your full balance, interest is charged on it which can sometimes be more than the value of reward points that you have earned on that outstanding amount. So, try to pay your full outstanding balance each month to avoid interest charges and late payment fees, and get the most out of your credit card.
Credit Cards can save you a lot, provided that you use them responsibly and wisely. Earning reward points on your purchases is a great thing, but make sure that you don’t overspend just to earn a lot of rewards as it can leave you having poor financial health. So, try to maximize the profit by understanding your spending habits and choosing the right cards. Earning reward points is not all that is needed but you should also redeem those points before they expire.