It’s difficult enough to get credit these days. So when a company does give you credit — and, on top of that, offers you incentives to use it — you’re smart to make the most of it. Here are a few simple strategies you can use to do just that.
Choose Your Card Wisely
There was a time, a few years ago, when credit card companies begged for your business. You could fill your wallet with cards and slap down red, blue, green, or gold, depending on the color of your necktie that day. Not anymore.
This means you should choose your card(s) wisely. Decide what rewards benefit you the most. Do you have a long drive to work each day? Then maybe a gas-rewards card is best. Do you often travel on business? Find a card that rewards you with airline miles, car rental benefits (such as enrollment in premium rental programs or roadside assistance), and hotel points. To make the most of your purchases, look for a card that has a relationship with hotels, airlines, or retailers that you use regularly. You’ll earn more points by doing business with official partners of your card.
If you’re especially interested in building up airline miles, think about linking all your purchases — from gasoline to groceries — to your airline miles account. Often you can earn extra miles for staying at a particular hotel or renting a car from a specific agency, so be alert to these deals. Some cards enable you to automatically channel purchases and points earned at say, Starwood hotels, to your Delta SkyMiles account. Or just look for a card with your airline’s logo on it and you’ll be assured that every purchase you make accumulates miles with that carrier.
Reach for the Cash
Credit cards that offer cash rewards for using them are some of the most popular on the market. Obviously, it’s nice to look forward to a cash prize when you build up enough points. But another reason these cards are appealing is that they generally come with fewer restrictions on the rewards.
Take note: Different cards offer much different rebate levels. Some reward you with cash amounting to just 1 percent of your purchases. Others, such as American Express Blue Cash, offer up to 5 percent back on qualifying purchases.
Stick to One Card
Clearly, if you use three different cards, your points will be spread out in three different programs, and it will take you three times longer to accumulate enough points to earn any sort of reward beyond a new blender. So when you pay, always pay with the same card. And use it as often as possible. (Within reason, of course: Buying a $3 latte with your credit card will not endear you to the caffeine-deprived folks waiting in line behind you at the coffeehouse.)
Read the Fine Print
When your statement arrives, check it to see if your company has made any changes in its rewards program. Most companies have been adjusting rewards policies a fair amount lately; so make sure you’re on top of changes and react to them accordingly. Pay special attention to expiration dates on airline miles. Consumer Reports says that 75 percent of all airline miles earned go unused each year. And it’s not only credit card rewards terms you should monitor — airlines change their miles policies with some frequency as well.
The credit card landscape has changed dramatically in just the past few years. Remember all the envelopes you once received, emblazoned with offers for “0% Interest Now on Balance Transfers!” Those days are long gone. But you can still earn perks from credit card companies if you know where to look and how to make the most of the rewards programs they offer.
Tom Stein has contributed to leading business and general interest publications including Wired Magazine, Business 2.0, Venture Capital Journal, and Tennis Magazine. Previously, he held staff-writer positions at the San Francisco Chronicle, Red Herring, and InformationWeek. He also was a senior editor at Success Magazine, where he covered some of the most unusual and utterly unique entrepreneurial companies in the world.