6 Proven Tips for Maximizing Credit Card Reward Points 

If you can’t pay it in cash, you can’t afford it. That is my golden rule whenever I use my credit card. 

Having a credit card comes with a lot of advantages, such as having increased purchasing power. When handled responsibly, a credit card can also improve your credit rating. One of my favorite benefits is that you can earn rewards points every time you make a purchase with your card. These points are often good as cash or can be exchanged for merchant vouchers. 

To make these credit card rewards points even better, you need to learn how to maximize two things: how to use your cards and how/when to redeem the points. Here are some tips so you can strike that sweet spot between the two: 

Pick the Right Card 

There are so many credit cards to choose from; some banks even offer different cards to a customer.  How do you know which one is the “right” one, then? The answer is, it depends. Ideally, your choice should be based on your lifestyle and the kinds of purchases you make the most often, and the types of rewards you want. 

For instance, there are credit cards that give you rewards points and/or rebates when you buy groceries. If you’re a frequent traveler, there are cards that rack up points whenever you buy airline tickets or book hotel rooms. The points can either be converted into air miles or discounts. 

These are just a few examples when it comes to the actual rewards points. For other perks, some credit cards allow customers to immediately convert their purchases into monthly installments. There are also those that offer advanced sales and discounts for popular concerts or movies. 

New Card? Get the Sign-Up Bonus 

If it’s your first time to get a credit card or if you’re getting a new one, check out the sign-up bonuses. Often, you’ll get double the points or receive gift certificates to your preferred merchant if you spend a certain amount within a specified time period. These sign-up rewards are just one way for credit card companies and banks to attract new customers. 

Of course, make sure that the initial spend amount isn’t something so extravagant that you end up in debt. However, if you can earn the sign-up bonus without any changes in your budget, then by all means pursue it. A good example is if the reward requires you to spend X amount on groceries. Because you’re going to need groceries and other supplies anyway, it’s worth considering getting the sign-up bonus. 

Buy Big 

The general rule for credit cards rewards points is the bigger the amount, the more points you’ll receive. Thus, it’s a good idea to use your credit card for big purchases such as a TV, a refrigerator, or an air conditioner. Flight tickets and hotel accommodations are also good candidates for buying big with your credit card. The same goes for restaurant reservations for meetings, birthdays, and the like. 

This doesn’t mean that small purchases are a no-no for your credit card, since the points will accumulate anyway. However, to make the most of the rewards points, the best thing to do is to use your credit card for more expensive purchases. 

Consider a “Gas Card” 

If you have a car and you drive daily, you might want to consider credit cards that allow you to earn more points when you purchase fuel, engine oils, and other related products. In addition, you may also get straight discounts (e.g., Php 2 off per liter) or instant cashback up to a certain percentage. These rewards come on top of other rewards points that you get for other kinds of purchases. 

Don’t Redeem Immediately 

Banks and credit card companies have several merchant partners, which means that rewards often cycle. What’s more, there are some rewards that are more valuable—literally and figuratively—than others. That’s why it’s better to study the offers carefully before redeeming them. Wait for new ones to come if the current ones don’t meet your preferences. 

In addition, don’t feel pressured to spend your points. These don’t expire, which means you can keep them in reserve until a truly worth-it reward or perk comes along. Think along the lines of a new gadget, airline miles, or even a staycation at a 5-star hotel. 

Pay Your Bills On Time 

To make the most of your rewards points, make sure to pay your credit card bills on time and in full whenever possible. Doing so will not only improve your reputation and credit record, but also ensure that you won’t be using your points just to pay off your balances. 

If you’re a good-paying customer, you may also receive other bonuses and special offers from your credit card provider.  

Filipinos are known to be “madiskarte” about finances. Accumulating and spending credit card reward points wisely is one manifestation of this. Hopefully, these tips can further help you manage your finances and make the most of your hard-earned money.