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Right here's how one can maximize bank card rewards with out affecting your steadiness

There are many different credit cards available and consumers have a seemingly endless choice of payment options. Banks know this, and so many banks offer rewards for using their credit cards. Banks and other financial institutions want their card to be at the top of your wallet, and they offer incentives to keep it there.

The world of credit card rewards

There are three main types of credit card rewards that you can take advantage of when making purchases with a card.

Signup Bonus – Many cards offer an initial welcome offer to open and approve a new card. You may earn 60,000 airline miles after spending $ 3,000 in the first 90 days of receiving the card.
Ongoing Purchase Rewards – You will also receive rewards for each of your purchases. Some cards offer a certain amount for all purchases, while others offer higher rewards for spending in certain categories.
Card Rewards – Rewards in this category include, for example, a free checked bag for an airline co-branded credit card or a free hotel night each year to mark your anniversary as a card member.

If you do the math, you can find that the return on sign up bonuses is significantly higher than the return on daily expenses. Instead of just getting a point or two for every dollar spent, you may get 15 to 50 points per dollar if you meet the criteria for a sign up bonus. One strategy I've used to maximize credit card rewards is to regularly sign up for new credit cards.

"Doesn't that hurt your credit?"

By far the most important question I get when I tell someone about credit card rewards and how I've used them in the past few years, "Doesn't that hurt your credit?" This is a great question, and shows that the person asking it understands the importance of good creditworthiness to your overall financial health.

Your credit score is a number that banks and other financial institutions use to get an idea of ​​the likelihood of you paying back your debt. While it is not a perfect indicator, it is widely used in many areas of finance. Your credit score mainly consists of five different components. Having multiple different credit cards can actually help with one of the biggest components – your utilization percentage. As a practical example, my wife and I have been applying for several new credit cards every year for over five years and maintaining credit in the high 700s.

Be organized – find a system that works for you

Of course, the more credit cards you have and the more different types of rewards you get, the more complicated it gets. When you only have one credit card, paying bills and keeping track of expenses is pretty easy. However, as you keep adding more credit cards, some organization is required to keep everything in order.

Most of all, you want to make sure that you have a system in place that will allow you to pay your bill in full every month. You can keep a spreadsheet or folder of baseball card sheets or a label printer to see which card to use in each category. The best way to keep track of your bills and budgets is of course directly in the Mint app. Different things work for different people – find the system that works best for you.

Take it slow – it's a marathon, not a sprint

When some people first hear about credit card rewards, they go out of their way and apply for tons of credit cards in a short period of time. This can be a strategy for collecting a ton of credit card rewards quickly, but it is not recommended for two reasons. For one, applying for a lot of new cards quickly increases the likelihood that you will make one or more mistakes. Another reason is that many banks and credit card companies see poorly people who apply for many credit cards in a short period of time. Even with good credit and solid income, you could be denied cards if you have applied for many credit cards recently.

One strategy that is likely to be more successful is to take it slow and clean out your credit card applications. One every three to four months is a reasonable rule of thumb. If you have a spouse who also has good credit, you can double up on new applications. But rather than just applying for new cards that seem good, it's best to come up with a plan first. Pick a trip that you want to take on points for free. Then select the cards that give rewards that will help make this journey possible.

The bottom line

Credit card rewards can be a great way to add additional value, but only if you use them responsibly. You can choose to maximize either airline miles, hotel points or direct cashback. Credit card rewards can be used for travel or as a bank statement balance. To maximize your credit card rewards, stay organized, apply for new cards slowly, and always remember to pay your credit card bill in full each month.

Dan Miller (34 posts)

Dan Miller is a freelance writer and founder of, a website that helps families travel for free / cheap. His home base is in Cincinnati, but he tries to travel the world as much as possible with his wife and 6 children.


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