Are you a responsible spender? Do you have your debt under control? Do you have an average or above-average credit score? If you answered yes to any of these questions, you may be the right candidate to open up a credit card to start earning some serious credit card rewards.
From frequent flyer miles to cash back bonuses, more and more credit card companies are offering incentives for opening up an account. And with so many offers on the table, it can be hard to filter through the options, understand the best strategy for maximizing credit card rewards and avoid unnecessary extra spending to earn points.
So how do you maximize credit card rewards while minimizing your credit card balance? Just follow these three simple steps: prioritize and research, focus and convert wisely.
Step 1: Prioritize and Research. Before you run off and sign up for the shiniest credit card offer in sight, take a moment to prioritize your reward choices and research your different credit card options. Are you looking for frequent flyer miles on a specific airline? Interested in free hotel stays overseas? Or do you simply want some extra cash put back into your account for everyday purchases? Decide first on which type of reward you’re looking for before you sign up for a card. Once you determine what type of reward (or what company you’d like to receive rewards from), you can then start researching your credit card options. There are tons of credit card rewards and travel forums on the web that can help you narrow down your options in specific rewards categories.
Step 2: Focus. Many rewards bonuses for new cardholders require you to spend a certain amount in the first few months of opening the card. That’s why focusing on a single credit card and charging all of your spending to one card is the smartest way to meet any minimum spending requirements you have on your new card. By committing to using single credit card in a short period of time, you’re much more likely to reach your spending minimums and earn your bonus incentives. Just be careful of how much you charge, though; if you plan on charging hundreds or thousands of dollars on a single card, you may run the risk of bumping up against your card’s credit limit.
Step 3: Convert wisely. If you’re ready to turn your reward points into flights, hotel nights or other discounts, now’s the time to dig in deeper into your conversion options. Some credit card companies will offer you bonuses if you convert a certain number of rewards points over to frequent flyer miles, and others have special partnerships with retailers to offer discounts on purchases or even gift cards. Like during the research phase, take a look at credit card and travel forums for tips and strategies of getting the most bang for your buck on your particular credit card.
Regardless of which type of credit card reward program you sign up for, be sure you’ll use it responsibly and that you’ve got your spending habits under control since abusing your credit card privileges can damage your credit score. If you are comfortable with your spending behavior, you’ll find plenty of opportunities to use credit card reward programs to your advantage.
