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Playing the rewards credit cards game can be a lot of fun—and very, well, rewarding. While the average redemption value for most rewards credit cards is the equivalent of a one cent rebate per dollar spent, there are numerous ways to get much more bang for your rewards earnings bucks, so to speak. Here are six tips to get the most of rewards cards earnings.
1. Maximize the value of rewards points. Many rewards credit cards offer ways to increase the value of rewards earnings, e.g. by shopping with their partner vendors. For example, Discover More rewards cardholders can boost rewards earnings 25–100 percent by going online to redeem for gift cards with Discover partner stores. For partner stores like Lands End, Gap, and Pier 1 Imports, for example, $20 in rewards earnings will give you $25 in shopping power at those stores, a 25 percent boost of rewards earnings. Sending flowers to your Mom or sweetheart by cashing in $20 in rewards earnings for a $40 gift certificate at FTD.com will net you a 100 percent increase in rewards earnings. (Keep in mind that credit card rewards deals constantly are updated, so the examples used in this article may change over time).
Similarly, most rewards credit card issuers offer a variety of goods for sale in their online malls. When shopping with points, checking out the special deals can often boost the value of rewards points by 50 to 100 percent.
2. Find for the best redemption deals. Many airline rewards cards allow cardholders to pay for airfare with rewards points at a straight 1 point = 1 cent ration. However, you can boost the value of earnings simply by digging around for good deals on plane tickets. The best value is generally to be had on overseas trips. For example, booking a fall flight to Paris on Delta Airlines could easily cost you close to $1,000 in airfare. However, 60,000 rewards miles earnings (plus about $88 in taxes and fees) will let American Express Delta Skymiles cardholders book the same flight for free. That’s an average redemption value of about 1.5 cents per dollar spent (or higher for cardholders with bonus miles included).
3. Stay on top of special offers. Rewards card issuers often feature special offers. Classics are the rotating 5 percent cash back deals offered by e.g. Chase Freedom card and Discover More cards. Plan ahead, and get 5 percent cash back on home improvement purchases, clothing, travel-related purchases, and so on. Purchase categories change every three months, and some cards feature a ceiling on rewards, so it pays off to familiarize yourself in advance with the terms of special offers.
4. Take advantage of points transfer deals. While transferring points to someone else typically costs too much to be worthwhile, some airlines miles cards occasionally send out very worthwhile transfer offers. For example, the Amex Delta Skymiles card from time to time gives cardholders the option to transfer points at a cost of one cent per mile, and get 50 percent bonus miles back. With such an offer, you could transfer e.g. 25,000 miles to buy a 25,000 awards ticket for your spouse, and get 12,500 bonus miles back, leaving the effective cost of your spouse’s ticket at $125 (plus a $30 transfer fee).
5. Combine rewards credit cards. Some rewards cards, like American Express Blue Cash, lets you earn 5 percent back on supermarket, gas, and drug store purchases once you have charged $6,500 to the card. Combine that with e.g. Capital One VentureOne card, which offers 1.25 percent cash back on all purchases. Cardholders comfortable with a $65 annual fee, can kick up earnings to a full 2 percent cash back with the Capital One Venture Card; the extra fee is worth it for anyone charging more than $10,000 a year to the card.
6. Get Elite status. Some travel awards credit cards roll out the red carpet earnings for cardholders who spend a certain amount each year or who stay or fly over specified thresholds with partner hotels and airlines. For example, earning elite status on the Amex Starwood Preferred Guest hotel rewards card will boost rewards earnings to four to five points per dollar spent for eligible stays once you reach the Gold or Platinum Preferred level. Similarly, earning elite status with the Amex Delta Skymiles Card will give you perks like bonus miles, fee-free baggage check-in, priority check-in, multiple miles earnings on purchases, and above a certain level, complementary first class upgrades when seats are available. Not bad for simply flexing your swipe muscles.
