Want to make your credit cards more rewarding this year? The key is to make sure they still align with your spending habits and goals.
Whether you’re a newbie or a veteran cardholder, following these eight tips can help you earn more, save more and get more value out of your rewards.
1. Take stock of your cards
Start by evaluating the current plastic in your wallet. Have you been earning airline miles but want to pivot to more flexible cash back? Are you no longer using a card’s benefits enough to justify its annual fee? Is the card you opened for a balance transfer offer no longer useful?
The good news is you're not necessarily stuck. You may be able to request a "product change" from your card's issuer.
This process lets you upgrade or downgrade to a different product within that issuer's portfolio — say, a card with better rewards or no annual fee. The process can vary, but in most cases there's no new application, and hence no hard inquiry on your credit report. You often retain the same account number and, as such, the same account history. All of this is beneficial for your credit scores.
One drawback to a product change, however, is that you generally aren't eligible for the sign-up bonus on the product you switch to. (You're not opening up a brand-new account, after all.) So if you're eyeing a juicy pile of bonus points, it might be worth a separate application. Even still, you may want to retain your old card and its account history, especially if it's not charging you an annual fee. Just make sure to use it at least a few times here and there, perhaps to pay a recurring monthly subscription. That way you’ll avoid having it closed due to inactivity.
2. Ask for a retention offer
After taking inventory, you might have a card that you’re on the fence about. Rather than ditching it outright, consider seeking a retention offer — an incentive that an issuer may grant you to keep you as a customer.
Call your issuer and say that you’re thinking about canceling your card, but before doing so you'd like to know if there are any retention offers available. You may be offered a statement credit, bonus points or an annual fee reduction or waiver. Any of the above could make it worth your while to stick around.
Listen to the terms carefully, though. There may be minimum spending requirements in order to qualify for the retention bonus, just like when you open a brand-new card. Often, if you accept the retention offer, you will be obligated to keep the card open for another year.
3. Focus on flexibility
If there’s an airline, hotel chain or retail store that you're loyal to, it can make sense to carry its co-branded credit card, given the perks those cards can dole out. But such cards also tend to lock you into their own rewards systems, meaning your points or miles can't be used beyond the boundaries of that brand.
General rewards credit cards, though, are much more flexible.
For instance, if you have a card that earns Chase Ultimate Rewards® points or American Express Membership Rewards points, you can redeem them in a variety of ways. Travelers especially prize those kinds of points because they can be used to book travel directly with the card issuer, or transferred to many different airline and hotel loyalty programs, often leading to outsize value.
4. Track your rewards
Tracking your credit card points, including knowing exactly how many you have across multiple cards, is critical to planning your reward travel.
If you know only that you have “a bunch” of Marriott points, for example, you may assume it's enough to cover that anniversary trip to Paris. But you could be in for a rude awakening when you discover that the chic hotel you want in peak season is going for a hefty 100,000 points a night — and your stockpile was really only 150,000 points total.
Another important part of tracking points is knowing when they expire. Many travel points from general rewards credit cards don’t expire as long as you hold the card, but that's not always the case for hotel points and airline miles. And it can be hard to keep track of each program’s policies.
Even if it's just in a simple spreadsheet that you update a few times a year, tracking your points helps you set goals and make sure you can take that dream trip.
5. Know the value of your points
It may be difficult to think of them this way, but points and miles are a form of currency. If you start recognizing rewards as actual money, it can help you make the best redemption decisions.
In some rewards systems, points are worth an industry-standard penny apiece, which makes it fairly easy to determine the value of your rewards stockpile: 100,000 points in such a system would be worth $1,000.
The problem is that point values in many other rewards systems aren’t concrete. They can fluctuate greatly, and their value can be subjective depending on your goals.
Still, with a little research, you can often find a "baseline" value, meaning the per-point value you can reasonably expect to get and should strive for. Any value below that baseline is a poor deal, and any value you can extract beyond it is quite good.
Get in the habit of questioning your rewards redemption before you make it, too. Ask yourself: "Am I getting a good value for these points?"
6. Save more with card offers
These can be easy to miss if you’re not looking for them, but many credit cards from major issuers feature one-time money-saving offers with other merchants — though they're not automatic.
You'll have to log in, click to add the offer to your card and then use the card to make a qualifying purchase at the retailer. You’ll then get the advertised discount, statement credit or bonus rewards, though it may take some time to appear on your statement.
There's no penalty for activating offers that you don't end up using, so feel free to add as many of these built-in coupons to your card as you want.
7. Stack your rewards
One simple step before you do your online shopping can earn you even more rewards. Rather than going to the retailer’s website directly, click through a shopping portal first.
Shopping portals generally receive affiliate revenue for sales made through their platforms, and they pass some of that revenue on to you in the form of points or cash back.
Cashback Monitor is a website that tracks reward rates at tons of these shopping portals, showing you which one is currently paying the highest rewards at the store you’re looking to shop at.
8. Get out of your comfort zone
Like with most things in life, the easiest path is usually not the most rewarding one. To get the most out of your credit card rewards, you sometimes have to go outside your comfort zone.
For instance, using American Express Membership Rewards points for Amazon purchases is super easy. The problem is that you’ll get only 0.7 cent in value per point that way. Instead, consider using Membership Rewards points for travel, in which case they can be worth at least a full cent each, and sometimes much more if you transfer them to an AmEx airline partner.
On that note, most airlines are members of an airline alliance partner program. Often, if you do a little research and take the extra step of booking travel via an airline's alliance partner (rather than directly with the main airline itself), you could get a cheaper rate and, therefore, hold on to more of your valuable miles.