Credit cards are no longer just a means to make purchases and pay them off in EMIs. With the rise of credit card reward programs, these cards have become a tool to earn rewards and cashback on everyday spending. However, many people find these reward programs too complicated to understand and fail to make the most out of them.
To take full advantage of these programs, it’s important to understand how they work and strategize your credit card usage. In this blog, we’ll explore some tips and strategies to help you maximize your credit rewards card.
How Credit Card Reward Points Work
Before delving into tips and strategies, it’s important to understand how credit card reward points work. Most credit card issuers assign reward points for every Rs. 100 spent on the card. These points can be redeemed for merchandise, gift cards, air miles, and more.
Some credit cards offer extra rewards on specific usages, such as dining, travel, and online shopping. However, rewards are typically complex since they are not calculated in terms of cash. Unless a good number of points are accumulated, they won’t be of much use.
Online redemption of reward points is one of the most convenient ways to redeem them. Some card issuers also offer cashback credit cards that provide direct cashback into your statement.
Evaluate Your Spending Habits and Find a Card that Suits You
To make the most of your credit card rewards, start by analyzing your cash flow. Figure out how much money you spend each month and in what categories.
Once you’ve noted how you’re using your bank credit card, you can identify which type of card will best suit your lifestyle and existing spending. Choose a card with the best rewards credit card that aligns with your spending habits.
Choose a Card with a Solid Sign-up Offer
When looking for a new cash-back card, make sure you’re getting a great cash-back card welcome offer with a minimum spending requirement you’ll easily be able to meet. Look for cards that offer bonus cash back in your biggest categories.
Find Cards that Offer Bonus Cash Back in Your Biggest Categories
Identify which categories you spend the most on each month and apply for a cash-back card that pays you the best dividends for your personal finance habits. For example, if you spend a large percentage of your money on groceries each month, look for a card that offers cash back on grocery spending.
Avoid Carrying a Balance and Paying Interest
To truly maximize your credit card rewards, it’s important to avoid carrying a balance and paying interest on your purchases. With the average credit card APR currently over 19 percent, racking up rewards won’t make any sense if you also rack up long-term debt.
Conclusion
Credit card reward programs can be a valuable tool to earn rewards and cashback on everyday spending. To make the most of these programs, start by analyzing your spending habits and finding a card that suits your lifestyle.
Look for cards with solid sign-up offers and rewards that align with your biggest spending categories. And most importantly, avoid carrying a balance and paying interest on your purchases.