When we think about the credit cards we have, there’s a reason why we signed up for them. It could be the exceptional cash back or travel rewards offered, or it was a generous low introductory rate that allowed us to get some high-interest debt paid down quicker.
Ultimately, there was an incentive involved that compelled us to action. But are we using those rewards to their full potential? According to a Cardrates.com survey, 83% of people signed up for a credit card because of their rewards. Yet, only 33% of people surveyed used the travel perks offered on their card, despite it being the reason they signed up for the card.
It shows there’s a gap between why we signed up for the card and getting the most rewards from them. The main cause relates back to communication, where 62% of cardholders surveyed said they would use their rewards more, if notified about them. With that in mind, here are some strategies to be more proactive in keeping that information front of mind.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Tips for tracking credit card rewards
- Stay connected: Download the card issuer’s app and review statements, as they contain rewards earned. I also visit my lenders’ websites regularly to see if there are any new promotions or features I might be missing.
- Use a tracking app: Apps like The Points Guy or AwardWallet keep track of card rewards from many lenders.
- Factor rewards into your budget: When I budget, I also pay close attention to my credit cards – not only the balances owed, but my rewards, expiration dates for redemption (if applicable) and redemption limits in my spreadsheet.
- Prioritize cards based on rewards: Most of us carry more than one card, so it’s important to prioritize them based on maximizing rewards. To demonstrate, if you have a card offering 5% cash back on groceries, choose that card when checking out at the grocery store and get 5% cashback.
Credit card reward considerations
- Know the fine print: You may have to squint or get a magnifying glass, but pay attention to any asterisks or plus signs in those footnotes of your credit card disclosure statement, as they might contain restrictions.
- Set reminders: For credit cards with quarterly rotating categories, I set a reminder on my phone to check them when they change. From there, I might switch up which card I use based on the rewards offered.
- Hit the intro bonus: When I get a new card, I’ll place regular expenses like utilities or groceries on it until I hit the spending limit to earn the intro bonus.
- Prioritize redemption bonuses: With some cards, we might earn more value by taking the travel perks over cash back redemptions, so pay close attention to the card terms and prioritize rewards based on value and preferences.
- Determine value: In all instances, cash back rewards only make sense when we pay balances off each month. Also pay close attention to the annual fees the card charges and evaluate whether the rewards earned more than the fees.
The bottom line
Credit card rewards are often the reason why we sign up for a card. That said, studies show there’s a communication gap between the card issuers and their customers on remembering perks. By taking these proactive steps into account, it can help us stay informed about our credit card rewards and ensure we’re maximizing them to their fullest potential.
Related content
-
Can You Get a Mortgage In Retirement? And Should You?With interest rates still stubbornly high and home prices elevated, here’s how a retiree living on a fixed income can land a decent mortgage.
-
Converting Retirement Savings to a Roth IRA? Don't Do ThisYou might want to convert all of your savings to a Roth in one go, but you could end up paying hundreds of thousands more in taxes than you have to.
-
California Wildfires and Insurance: Looking for HelpLos Angeles-based insurance expert Karl Susman shares the view from his agency’s office as all hands are on deck to help their policyholders.
-
A Strategic Way to Address the Tax-Deferred DisconnectWhat you don't know could cost you a fortune. Here's how to make the most of a tax-deferred retirement account and possibly save your heirs a bunch on taxes.
-
CPI Report Keeps the Fed on Track: What the Experts Are Saying About InflationCPI Disinflation in key areas of consumer prices should help the Federal Reserve stick to its policy path of gradual cuts to interest rates.
-
To Insure or Not to Insure: Is Life Insurance Necessary?Even if you're young and single with no dependents, you may need some life insurance. Here's how to figure out what and how much you may need.
-
How to Organize Your Financial Life (and Paperwork)To simplify the future for yourself and your heirs, put a financial contingency plan in place. The peace of mind you'll get is well worth the effort.
-
Saving for Your Emergency Fund: As Easy as 1-3-6An emergency fund that can cover six months' worth of expenses is far easier to build if you focus on smaller goals at first.
-
Blowout December Jobs Report Puts Rate Cuts on Ice: What the Experts Are SayingJobs Report The strongest surge in hiring since March keeps the Fed on hold for now.
-
The Wrong Money Question to Ask After Trump's ElectionIf you're wondering what moves to make with a new president moving into the White House, you're being dangerously shortsighted. Here's what to do instead.
