How to Maximize the Value of Rewards Credit Cards
One big reason people decide to get three, four, or five credit cards is because of the rewards offered. Credit cards are much more useful when used for day-to-day expenses as they can earn perks like cash back, hotel discounts, airline savings, and more.
With so many rewards credit cards on the market and an abundance of information on the pros and cons of each card, it is difficult to choose the best options. We’ve created a quick guide that should help newcomers maximize the value of their credit cards in the United States.
If you’ve recently arrived in the United States and have a credit history in your home country, you can use a service like Nova Credit to transmit this information to a U.S. credit card issuer. This will help you get a better credit card with higher rewards.
Understand your spending habits
Many people look at the rewards offered by different credit cards knowing that they would redeem them all. The reality is a little different, as most people would have a hard time meeting all of the requirements to maximize each credit card reward benefit.
It’s best to think about your spending habits before looking for a rewards card. Do you spend most of your money in supermarkets, grocery stores, gas stations, and restaurants? Or are you a frequent traveler who often buys plane, train or bus tickets, while using ridesharing services? Do you stay at a specific hotel company property on most of your travels?
The answers to these questions should help you understand the category of card you should be looking for. Those who spend most of their money on everyday items would be very happy with a generic cash back card or a card that offers extra cash back on spending at grocery stores and supermarkets.
Frequent travelers should look for a card that offers airline discounts, airport lounge benefits, travel insurance, rental car benefits, and hotel rewards. Some cards are tied to specific airlines and / or hotels, while others are more general travel rewards credit cards.
Invest in more than one credit card
If you have a variety of spending habits, having two or three credit cards is the best way to maximize the value of the rewards available. Suppose you go for a general cash back credit card that also offers additional incentives to spend in grocery stores and supermarkets. This is the card you would use for your daily expenses.
Since this card may not offer a lot of airline or hotel rewards, you should also invest in another card that targets these categories. You can now choose which card to use based on the discounts or cashback benefits offered.
Use introductory offers for big spending
Many credit cards come with introductory APR offers, which are almost always 0% APR. This means that for 3 to 18 months, you would not have to pay interest on your credit card balance for this account.
These cards are a great tool for making large purchases. Suppose you are planning to purchase furniture or electronics for your home – sign up for an introductory APR card and pay off the balance before the introductory period ends.
We would go so far as to say that you should only keep a balance on your card if there is a 0% APR offer. It never helps to pay interest on credit card debt, as the money spent on interest payments would nullify any rewards offered by the card.
Those who come to the country as students, or about to start their first job, may not have much of a credit history in their home country. Some of the points above may not apply to the cards you can get, but don’t worry. There are many great options for people without credit, as shown in this listing.
After five or six months of timely payments on such a card, you can have a credit score high enough to get a better rewards credit card. As long as you stay up to date with your payments and pay off your balance in full, you’ll soon have a credit score high enough to get the best rewards cards on the market.