Credit cards have gotten a bad rap over the years. High interest rates, frustrating terms, and the ability to add extraordinary amounts of unsecured debt have all earned credit cards their place in the “bad debt” category. However, credit cards may not totally deserve the reputation that precedes them.
Credit cards, when used responsibly, can help you improve your credit score, teach you restraint and help you make important purchases. They can also come with perks and rewards that make them too good to pass up. So, with a little self-control, you can get in on the credit card point revolution and start making your cards work for you.
We’ve asked experts from across the globe to share their best hacks for using credit card points. Read on to find out how you can save big and get the best deals on everything from travel to groceries.
It may seem crazy, but credit card companies will reward you more for opening a new account than they will for your loyalty.
Martin Seeley, an entrepreneur and founder of Mattress Next Day, recommends utilizing the sign-up bonuses offered by credit card companies. He notes, “most credit card companies offer a large number of points as a sign-up bonus when you open an account. While these offers can change frequently, they are often worth thousands of points and give you the opportunity to accrue a major pool of rewards very quickly.”
Find Points That You Will Use
Another tip from our experts involves signing up for cards with points and rewards that you will actually use. For jet-setters, one of the best uses of points is for travel. With the soaring cost of fuel, flights and other travel-related expenses, this holiday will be a prime time to use those points.
Anna Rose Pardue, Communications Manager with Morning Consult, said that a study about how millennials look to spend their travel rewards revealed that “nearly 30% of U.S. adults and nearly half of millennials plan to redeem their travel points this November or December to combat inflation.”
Furthermore, the data revealed that millennials, more than any other generation, were not only travel rewards cardholders but also travel rewards card users. Millennials were also more likely to look for travel points and rewards and use them to influence where they traveled.
The whole idea is to find a credit card rewards system that works for you. If you don’t travel very often, then you may be better served by a card that offers significant cashback rewards or other perks.
Seek Out Promotional Offers
Credit card companies often offer time-sensitive deals and promotional offers that can help you rack up points quickly. Shopping Foodie CEO, Jamie Penney, said, “Boosted rewards rates are occasionally made available by card issuers in the form of time-limited promotions.” He recommends signing up for company emails to ensure that you are receiving promotional offers.
Families who eat at home more than they eat out can also take advantage of certain trends. For instance, Penney states, “To accommodate consumers’ growing spending, many issuers have begun offering additional incentives for grocery and meal delivery. Additionally, you may receive time-limited, personalized offers that grant you the opportunity to earn bonus incentives. These promotions are worth taking advantage of because of how quickly they can add up to significant rewards.”
Invest Your Cash Back
Want to make money off of your credit card points? Rob Berger, founder of allCards.com, suggested that you invest your credit card rewards.
He said that while “a lot is written about using points and miles for free travel, which is a great strategy,” he instead converts all rewards to cash and then invests those rewards. He has been doing it for around three years and now has an investment balance of around $30,000.
Pay Off Your Statement
Did you know that you can use your points to pay off your statement? Fred Baker, Senior Travel Editor for Travelness, said, “If you have a large balance on your credit card you may be able to use your points to pay it off. This can help you save money on interest and get your balance down to zero.”
Carrying a lot of debt each month on your credit card will not help you, regardless of how many points you get for spending the money. It can take years to pay off credit card debt, particularly if you only make the minimum payment each month. Using your points to pay down your statement can help you get out of the vicious cycle of debt and work toward financial freedom.
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