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Welcome to the wild world of credit card rewards, a place where terms like “churning” and “mileage runs” are a regular part of the conversation. It’s not for the faint of heart, the disorganized or the undisciplined.
However, if you get a kick out of strategy games, you might enjoy it.
The basics of gaming the credit card rewards system are below, but this article is not the final word on the subject. Entire blogs — such as The Points Guy and Million Mile Secrets — are dedicated to rewards.
What’s more, you should NOT try these strategies unless you’re able to pay off your credit card bill each month on time. Paying interest negates your rewards, and carrying a balance is a good way to dig yourself into a financial hole.
But if you are responsible with your spending, the credit card rewards game can be lucrative. Ready to learn more about winning the game? Here we go.
Find the cards with the best rewards
First, you need to find the right rewards credit card. In the past, rewards cards were fairly straightforward. You spent money, and you earned cash back, points or miles.
Today’s cards may only award you for certain spending categories, or the card may have rotating bonus categories.
Look for cards geared toward your buying habits. If the card offers cash back, don’t settle for one offering a mere 1 percent. The Blue Cash Preferred Card from American Express has historically had one of the best cash-back offers, giving 6 percent back on groceries. However, you can find other cards offering 3 or 5 percent back as well.
Some of the best rewards credit cards might come with an annual fee, but don’t immediately dismiss a card because of it. Many cards waive the fee for the first year, which gives you time to determine if the rewards are worth the cost.
Don’t be afraid to use multiple cards
The rewards credit card game works best if you have multiple cards in your pocket. That way, you can cherry-pick the best rewards for each purchase you make.
When you’re carrying multiple credit cards, the best way to use them is to affix a label to each card reminding you of the rewards level and which purchases are best with that particular card (i.e., dining out, groceries, gas, etc.).
Keep in mind that cards may cap rewards. For example, the American Express Blue Cash Preferred gives you 6 percent cash back on up to $6,000 in grocery purchases each year, but other cards may limit rewards to much lower amounts.
Keep track of your rewards levels for each card. When you max out a card’s rewards, remove it from your wallet for the rest of the year.
Jump on bonus offers
Some people earn impressive rewards by slowly and steadily racking up points and miles. However, to get the most bang for your buck, look for bonus offers that provide up to 50,000 points/miles or even more.
These bonus offers are generally for new accounts and have strings attached, such as charging $2,000 to the card within the first three months. However, they have incredible value. The best bonus offers can give you hundreds of dollars in free miles or points to be used toward travel or other rewards.
Connect your cards to loyalty programs
Most airlines have frequent-flier programs that can be connected to an airline-branded credit card. By combining the miles you earn from credit card purchases with the miles you earn by loyally flying a favorite airline, you could be in line for other perks such as seat upgrades, lounge access and concierge services.
Don’t forget about loyalty programs through hotels and car rental companies. Some allow you to transfer points to partner programs, a good way to supplement credit card rewards.