4 Efficient Strategies to Maximize Your Credit Card Rewards Without Affecting Your Credit Scores
Making the most of your credit card rewards isn’t a hard game. However, it gets tougher when you want to improve your credit score at the same time. For example, opening new credit cards can help you earn rewards. But on the flip side, it leads to a small drop in credit scores. Similarly, closing credit cards can hurt your scores.
What should we do to max out rewards without hurting our scores? Well, you have to adopt a planned approach to ace this game. These 4 strategies can help you big time in this regard:
Research Before Picking a Credit Card and Its Reward Offers
There are so many options available for choosing a credit card. Also, you don’t necessarily have to use the one from your current bank or credit union. However, it’s always beneficial to do some research beforehand.
Choosing a credit card has a lot to do with your preferences. You should know what you want to get out of a particular credit card.
Figuring out where you spend the most money is crucial. It can be travel, booking hotels, groceries, dining out, etc. You should aim to pick a credit card that aligns with your main expenditures, personality and lifestyle. For instance, a credit card that is offering extra reward points on travel might not be a good fit for you if the last trip you made was two years ago. So do your research and know the reward benefits before picking any credit card.
2. Focus on the Flexibility of the Reward Programs
Getting a co-branded credit card makes sense if you’re loyal to a specific hotel, airline, or retail store. However, such credit cards offer the least flexibility. They tend to lock you into their reward system, that is mostly based on earning points or miles. This means you’ll have a hard time redeeming your rewards.
On the other hand, reward programs that are run by general credit card issuers have much more flexibility. You can easily convert or redeem their earned reward points on multiple brands. Therefore, apart from the perks, you should focus on the flexibility aspect of the reward program.
3. Look for Credit Cards that Complement One Another
You should keep some cards that give you bonuses on utilities, and others for travel and so on. However, this strategy can become more effective if your credit cards complement one another. This means you should be able to move rewards from one card to another. This way, you can pool them together for larger redemptions.
4. Keep Track of Your Bonuses
Opening multiple cards is easy, but managing them can be hectic. You should keep track of your rewards and payments before it gets complicated. Apart from trying to memorize everything, there are simple ways to do so.
You can use spreadsheets or stickers with reminders. There are also different apps that track your rewards and give you useful recommendations based on where you’re shopping and which cards you’re using.
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