If you’re like many Americans, chances are you’re into credit card rewards programs. That’s not just an assumption — the facts back it up. According to 2017 data from TD Bank’s Consumer Spending report, about 36 percent of Americans look for credit cards that have a wide variety of rewards, or that reward them for common purchases. Compare that to the 28 percent who seek low interest rates, and you get the idea.
What’s more significant, however, is that the majority of cardholders — 53 percent, that is — say they’d be willing to change the items they purchase in order to benefit from credit card rewards. While the majority of plastic users prefer plain old cash back as their primary reward, there’s no telling how they might change their spending habits if they knew about these unconventional uses for credit card rewards. Here are six things you didn’t know you could do with your points.
Save for Your Future …
Some cards help you save for retirement while you’re buying essentials like gas and aspirin. According to Julie Pukas, head of U.S. Bankcard and Merchant Solutions at TD Bank, that’s the smartest way to use a credit card. “Find a card that rewards you for your current spending behavior,” she said. “Gas, dining, groceries, entertainment … if your card rewards you for specific purchases, use the card for those purchases.”
With a card geared toward saving for retirement, you’ll get your usual percentage of cash back, but you can opt to funnel it into a brokerage account, cash management account, or a retirement account for your far-away — but not as far away as you might think — golden years.
… And for Your Kid’s Future
Long before you start worrying about how much of your credit card limit your kid will burn through during college, you can start saving for their education. For example, register your card with Sallie Mae’s Upromise rewards program. It works like a cash back program for online shopping, dining, traveling and groceries, but your points go right into a college savings plan. It’s just one thing you can do now so your kids have more later.
Chip Away At Your Mortgage
About 56 percent of American cardholders partake in a cashback program, making it by far the most popular type of credit card reward. And while paying your mortgage might be something you consider totally separate from credit card rewards, it’s a totally viable option. That’s right — you can turn common purchases into rebates, which can help you pay down your mortgage principal a little faster.
Pay Off Your Student Loans
You could use your credit card to pay off your student loans, but that’s inadvisable, and many banks won’t allow it. Instead, use your card’s rewards program to lend a helping hand.
Some credit card rewards programs will mail checks directly to loan servicers, and some cards offer extra-perky point-to-dollar conversion rates toward paying down your academic debt. Look for those that boast up to three points for every dollar spent when it comes to student loans rewards.
Give To Charity
Based on the survey data, about 44 percent of American credit card users would be willing to give their card rewards to family, friends, or charities. As it turns out, you can totally make good on that promise.
Your options run the whole kind-hearted gamut — turn your points into cash donations for everything from performing arts to disaster relief programs. The Make-A-Wish foundation lets you give your credit card miles directly to those in need, for example.
Because if you’re going to rack up bonuses with your credit card, you might as well rack up some karma, too.
Check Your Credit
Some credit rewards actually come in the form of resources to help you stay informed about your financial health. The TD Cash credit card is one example — in addition to the 3 percent cash back on dining, 2 percent cash back on groceries and 1 percent cash back on all other purchases, it provides a free VantageScore along with various credit education tools.
In addition to keeping an eye on your credit score, Pukas recommends you do one simple thing to keep your score up: “The most important thing cardholders can do is prioritize making their payments on time,” she said. “This has an impact on your credit score.”
Whatever you decide to do with your rewards, remember that 18 percent of cardholders let their points expire sometimes — so whether you’re donating to charity or paying off debt, don’t forget to cash in.