How to make the most of your credit card points | Popular Science
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How to make the most of your credit card points

Tips for choosing the right card, understanding the benefits, and getting the most money out of your rewards.

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Make the most of those credit card points.

Roi Dimor via Unsplash

If you have a credit card, you probably know the basic rewards it offers: maybe you get airline miles, maybe you get cash back, or perhaps it gives you points to shop on Amazon. But are you really making the most of those points, or are you leaving money on the table? Here’s how to ensure you get as much of that free stuff as possible.

How to choose the right credit card

“There are many different ways to approach maximizing your rewards,” says Beverly Harzog, credit card expert and consumer finance analyst for U.S. News and World Report. “The number one thing to do is pick the right credit card. Sometimes, people go wrong right there: they might pick a card they saw advertised, or that their neighbor had […] but you have to pick the card that's right for you based on how you spend your money.”

Travel cards, for example, are extremely popular, and their points tend to be worth more than other types of rewards programs. But if you don’t travel very often, you might be better off with a cash-back card, even if those travel points give you more for your dollar. “I like to think about that ahead of time, so you can have a goal, something that you're working toward,” says Harzog. Consider getting an airline miles card to help you pay for a trip to your brother’s wedding in Bermuda, for example.

If you’re comparing two similar cards and want to see which program’s points are more valuable, though, plenty of credit card sites—including U.S. News, The Points Guy, and others—have pages dedicated to calculating how much money different points are worth. For example, many airline programs redeem at a value between 1 and 2 cents per point, while most hotel points are worth significantly less—usually under a cent. So if you travel a lot, you might consider signing up for a miles program instead of a hotel points program.

Consider which points make the most sense for your usage, too. For example, my family lives in Detroit, which is a Delta hub. That means a Delta card makes a lot of sense for me. Even if I don’t fly Delta all the time, I know I’m guaranteed to fly there once or twice a year. Even if I liked another airline better, having that guarantee means my points will never go to waste.

Finally, when choosing a card, make sure you take into account all the hidden costs. For example, many cards offer a big signup bonus, but you have to spend a certain amount in the first three months to get those extra points. “Make sure you're going to be able to spend enough within that three month period without spending more that you intend to,” says Harzog. “If you use that card for stuff you were going to buy anyway, you're fine.” In addition, check the annual fee and make sure that your rewards outweigh the fee. You can sometimes call the credit card company and get the fee waived the first year (or more), too. And—though this should go without saying—don’t ever carry a balance on your card, since you’ll end up spending more in interest than you’ll ever gain in points.

Analyze your credit card benefits

Once you pick a card that looks good, get to know all of its benefits. A lot of people miss out on certain perks because they didn’t pay close enough attention, says Harzog. “It's very boring to read this stuff, and it's hard to understand because it's written by lawyers. Sometimes I have to read it a couple times.” Don’t hesitate to call the credit card issuer if you aren’t sure about something, and see if you can find discussion about the card elsewhere on the web that may shed light on its idiosyncrasies.

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For example, I’ve had the popular Amazon Prime Rewards card for years, and it’s great for me—I shop a ton on Amazon, so I earn 5 percent back on all those purchases, and eventually accrue enough Amazon points to buy something really awesome. I did not realize, however, that I can also exchange those points for a statement credit of equal value. This is a much better option, even if I’m still going to buy that big-ticket item on Amazon—if I buy it on a card instead, I accrue more points. If I buy it with points, I get nothing. I’ve definitely missed out on a few hundred dollars over the years with this mistake.

Similarly, plenty of cards come with shopping portals—like United’s MileagePlus Shopping, or American Airlines’ AAdvantage eShopping—that can net you more points per dollar you spend, as long as you navigate to the retailer through the credit card’s website. For example, shopping at normally might get you the usual 1 mile per dollar, but going to through United or American’s portal might get you 3 miles per dollar. If you’re already going to be shopping at one of those retailers anyway, that’s a great way to earn extra points over time. You may even be able to sign up for email notifications when certain retailers have points-related promotions. If you have multiple credit cards, you can use an aggregator like evreward or Cashback Monitor to see which shopping portal has the best rate for a store at any given time, too.

When it comes time to spend your points, you’ll want to make sure you spend them in the right places. A lot of cards offer the opportunity to trade your miles for, say, Amazon points or other perks, but they aren’t always a good deal. “Some cards don't transfer at 1-to-1 point values,” says Harzog, “So it’s important to check and see what your points are worth.” Again, do some research on your card and see what experts estimate for the point values on any given redemption. If you’re debating between getting a gift card and redeeming for travel, you may find your redemption program places more value on one or the other.

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How to track your credit card rewards

Finally, says Harzog, if you have more than one or two cards, it’s important to keep an eye on your rewards programs to make the most of them. She recommends checking out services like AwardWallet, which can keep track of your balance across multiple programs and notify you if miles are about to expire. “It'll track up to three rewards programs for you for free, or you can upgrade and get all kinds of analytics and notifications,” says Harzog. You do have to hook it up to your rewards account, however, so if you prefer not to do that, making your own spreadsheet works too—you’ll just have to update it manually.

AwardWallet can also keep track of bonus categories that net you more points. “Say you’ve got the Blue Cash Preferred card, and you get 6 percent back at grocery stores,” says Harzog. “You’re going to want to be sure that you use that card when you go to the grocery store.” Many credit card sites can also send you reminders, especially with cards like Chase Freedom where those categories change every few months. If it helps, put sticky notes on your cards to remember which ones to use where.

Finally, “don’t forget to actually use those rewards,” Harzog says. “So many rewards are lost because people haven't kept track, or they expire.” If you can, sign up for notifications to make sure you know when your points are going to disappear—that way, you don’t miss out on any free money.

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