It is essential to earn rewards on the purchases you make with your credit card to stay eligible for the sign-up bonus and avoid the pitfalls of fees and churning.
If you want to enjoy the benefits that these rewards cards have to offer, read on. This will give you the inside scoop on how to choose the best credit card. Also, discover when you can cash in your benefits.
Whether you spend on groceries, entertainment, and travel, there are plenty of ways to earn and enjoy credit card bonuses.
4 Ways You Can Make Most of Your Credit Card Bonuses
1. Earning rewards
Credit cards that offer sign-up bonuses are a great way to maximize points earned from spending. However, it can take a while to accumulate enough points to redeem the rewards.
While some cards are easy to use and earn points automatically, others require a more complex redemption process. American express platinum card review sites will help you determine which cards will give you the most value for your money. By following these tips, you can maximize the rewards on your credit cards.
To maximize your credit card rewards, make sure you know what types of purchases you make with them. Some offer 3% cashback at gas stations, grocery stores, and restaurants.
Others may offer points per dollar spent. Point values vary depending on the issuer and type of redemption, but travel offers the highest value for credit card points. Be sure to read the terms and conditions before making a decision. In addition to cashback, some credit cards offer other types of rewards.
2. Avoiding fees
Having a credit card does not mean you should spend everything you can afford. In fact, many of these cards charge fees that can add up to hundreds of dollars over time. Fees can be avoided by paying off your balance each billing cycle and setting up alerts on your phone to warn you of approaching credit limits. To avoid overdraft fees, keep your credit usage below 10% of your available credit. If you do not pay your bill on time, you may end up having it returned to you, which could cost you $40.
If you need to withdraw money from a cash advance, avoid using your credit card unless you have money available in a different account, such as a savings account or emergency fund. When you have to use your credit card to pay for an unexpected expense, a bank can refuse to accept your check because it bounced. Instead, a bank will return it to you, triggering a returned payment fee. The reason for this fee could be insufficient funds or a closed account.
3. Avoiding churning
In order to maximize your rewards, avoid churning when using credit card bonus offers. Churners often open several different accounts with the same credit card company. They then bank their points, use the credits, and then re-open their accounts to earn even more rewards. Some people may even bank their points from several different programs, combining them into one big stockpile. This strategy can have disastrous consequences for your credit rating.
Another serious risk associated with churning is missed payments. On-time payments make up the majority of your credit score. Since you may have several credit card bills, it is easy to miss a payment and end up in deeper financial trouble. To avoid missing payments, set up auto-payment or alerts so you won’t miss them. You can also check your credit score before committing to churning.
4. Getting a sign-up bonus
You may have heard that you can get a sign-up bonus for a credit card if you spend a minimum amount of money. However, you need to know that not all purchases count toward meeting this minimum. Cash advances, balance transfers, and prepaid debit card reload do not count toward this amount. You can also avoid sign-up bonuses for credit cards if you make payments on time with a bank account.
The sign-up bonus for a credit card varies in size and requirements. You must make a new application for a credit card to qualify for the bonus. Some credit cards have low minimum requirements, while others are intended for people with less than stellar credit. The most lucrative credit cards come with high sign-up bonuses, but you may not qualify for them if you have poor credit. To avoid being declined for a sign-up bonus, check your credit report for any issues.
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