Americans have a strong affinity for their rewards credit cards, although their comprehension of the associated benefits isn’t always comprehensive. The 2019 Credit Card Satisfaction Study by J.D. Power revealed that a significant majority of rewards cardholders express contentment with their cards. However, only 66 percent of cardholders claim a clear understanding of their card’s rewards benefits, and a mere 36 percent possess a full grasp of the supplemental advantages.
How to Optimize Benefits from Your Rewards Credit Cards
Understanding the potential benefits is crucial, given the recent expansion of rewards offered by credit cards. Beyond traditional advantages like travel rewards and cash back, users can now access new perks such as assistance with grocery expenses or exclusive access to prime seating at major sports and entertainment events.
Next, strategically leverage your credit card rewards. For optimal outcomes, start by exploring available credit card options on Credible’s platform. This website enables instant comparison of rewards cards, presenting real rate insights across cash-back, rewards, and travel rewards cards.
“Identify your priorities, spending patterns, and assess which rewards offer the most value in terms of tangible savings,” advised Jayson DeMers, CEO of Email Analytics, a tech firm based in Seattle, and a holder of multiple rewards credit cards. “For instance, frequent travelers benefit greatly from rewards cards that slash flight and hotel costs. On the other hand, if your expenditures are diversified, a cash back rewards card is a safe bet. That’s my preferred rewards strategy,” he emphasized. DeMers adjusts his choice of rewards cards based on his specific requirements.
Understanding the Regular APR on Your Credit Cards and Loans
“I utilize the CitiBank Double Cash card for all my personal expenses, earning a 2 percent cash-back on every purchase,” he mentioned. “For my business expenses, I rely on the Capital One Spark Business card, which also offers a 2 percent cash-back on all purchases. Additionally, I employ an Alaska Airlines Visa card for personal travel expenses. Despite its $75 annual fee, it grants me an annual companion fare discount, resulting in substantial airfare savings each year, essentially covering its own cost.”
Embrace Flexibility with Your Rewards Cards
Shaun Savage, CEO of GoShare based in San Diego, Calif., emphasized the critical role of selecting optimal rewards cards for his team. “As our monthly credit card expenditures grew, we tasked our analysts with identifying the most suitable credit cards for our business, aligning with our spending patterns,” Savage explained. “In our case, the Chase Ink Business Preferred Visa and the American Express Business Gold emerged as the top choices.”
For Savage and his team, the key consideration in choosing the best rewards card revolves around broadening user opportunities.
“If your goal is to save on travel through credit card rewards, both Chase Ink and Amex Gold present excellent options,” he remarked. “The Chase card allows point transfers to select hotels and airlines with a global presence. On the other hand, Amex Gold points offer versatility, covering various aspects of global travel, including flights, hotels, and rental cars.”
Discerning rewards cardholders should seek a rewards card with easily accessible redemption options.
“Both Chase Ink and Amex Gold cards feature user-friendly redemption portals,” Savage highlighted. “For instance, with Chase Ink, I transfer points to participating partners like Hyatt to fully leverage the card’s benefits.”
Keeping It Simple: A Guide to Efficiently Utilizing Rewards Credit Cards
Miguel A. Suro, a Miami-based attorney and personal finance expert at The Rich Miser, a money management platform, advocates for the use of cash back rewards credit cards due to their simplicity and user-friendly nature. “For most individuals, I recommend a cash back card due to its straightforwardness and ease of use,” Suro emphasized. He cited the example of the Citi Double Cash card, which provides a 2 percent cash back on all purchases. Additionally, Suro highlighted a noteworthy feature: the ability to transfer Double Cash credit/points to travel partners like several airlines if the cardholder decides to opt for a premium travel rewards card from Citi later on.
Furthermore, rewards card users can capitalize on their preferred retailers to accumulate substantial cash back rewards. “If you frequently shop at a retailer that offers a co-branded credit card with 5 percent cash back, it’s beneficial to open an account and make the most of it,” Suro advised. He mentioned notable examples like Amazon and Target.
Simplifying card usage and maintaining organizational efficiency are also key recommendations for those new to rewards cards. “Unless you possess extensive knowledge about miles and points, I suggest obtaining a general cash-back card along with a few 5 percent cash back store cards,” Suro suggested. “While it’s possible to optimize benefits, especially travel-related ones, by having multiple cards, it demands significant effort to ensure you choose the best card for each purchase. Staying updated with points-and-miles news is crucial since benefits are subject to constant changes.”