Editorial Policy

4 strategies to rack up card rewards faster

Susan Johnston Taylor

August 10, 2015

Trying to save up miles or points for a future holiday getaway? Here's a look at strategies for earning credit rewards faster — along with potential pitfalls to avoid.

1. Pay for a group and get reimbursed. If you're dining out or planning a trip with friends, using your card and getting paid back with cash or check helps you rack up rewards. “When I go out with friends, a lot of people will say 'I'll just charge it and you guys can give me cash,'” says Tony Mecia, who writes a weekly column on credit card rewards for CreditCards.com. “If you can charge something and get other people to pay you back, that's a way of putting money on a card but not actually having to spend any more money.”

The caveat: This strategy only works with trustworthy people who actually pay back their share. Otherwise, it could backfire and you'll wind up paying for someone else's meal or trip.

Also be careful that you actually deposit the cash and put it towards your credit card instead of treating it as found money, warns Wayne Sanford, owner of credit consulting firm New Start Financial Corp., in Allen, Texas.

2. Move as many expenses as you can to plastic. To accumulate more rewards points or miles, consider moving big recurring expenses such as your mortgage or rent payment to plastic, if possible. “A lot of people are still writing checks for things,” Mecia says. “They pay utility bills and the mortgage with checks. To maximize rewards, shift some of that spending on to a credit card.” Nowadays, many service providers have the option of taking payment via credit card.

The caveat: Don't let this strategy damage your credit. If you have $7,000 in available credit and you charge $5,000 each month, that could be reflected on your credit report as over-utilizing credit even if you pay off the balance in full, because credit card issuers often report balances to the credit bureaus mid-billing cycle. “When you're looking at maximizing those points and bonuses, make sure you don't put yourself in the position where you might be maxed out on a card,” Sanford says. He recommends keeping your credit utilization between 15-20 percent of your available credit if you have a car loan, mortgage application or refinance on the horizon, and below 30 percent if you have no immediate borrowing goals.

Another potential caveat is that some service providers such as management companies or utility providers may add a surcharge for paying with plastic, so you'd need to figure that cost against the value of the rewards. Asks Sanford, “If it's a $10 fee, does that get you enough points to compensate for that $10?”

3. Take advantage of bonus categories. Some credit cards offer ongoing or rotating bonus categories where you can earn extra rewards on purchases at restaurants, grocery stores, gas stations or office supply stores. “It takes forever for points to add up at 1 mile per dollar spent, but when you find cards that offer 2 times, 3 times or 5 times in categories you frequently utilize, the rewards add up much more quickly,” says Summer Hull, founder of the Mommy Points blog.

Some rewards chasers have several rewards cards with different bonus categories so they can fully cash in, Mecia says. “You might have one card that gives you 2 times the points at travel and restaurants, so when you go to a restaurant, you use that card,” he says.

The caveat: In some cases, you'll need to opt into a rotating bonus category before you can qualify for bonus points. There may be caps on how much you can earn in a certain category as well. And keep in mind that some retailers you might consider to be a grocery store or office supply store may be coded differently by your credit card issuer. When in doubt, check the fine print.

4. Buy gift cards. If you're trying to meet a spending minimum during a certain time period so you can qualify for a card's sign-up bonus, then buying gift cards to spend or gift later can help you reach that minimum threshold and ensure you meet any bonus spending requirements, even if you don't need to spend those gift cards right away. This strategy is especially handy with a credit card that offers bonus categories. “You could buy [gift cards] at a grocery store and that gives you double points,” Mecia says.

The caveat: Gift cards can easily get lost or sit unused, so “make sure you can actually spend what you buy in gift cards,” Mecia says. And make sure you can pay off your credit card balance right away or the interest charges will often outweigh the value of your rewards.

Credit card rewards can bring you closer to that dream vacation or other perks, but use these strategies responsibly and don't let the pursuit of points, miles or other rewards serve as an excuse to overspend.