Are you making good use of your credit card’s rewards points? For many of us, redeeming our points for travel may be on hold as we wait until vacations are safe and the world opens up again. However, that might take a while and those points can serve you a whole lot better used in other ways rather than just sitting in your account. That means it’s a good time to rethink your credit card points strategy to maximize credit card rewards. Here are some tips and tricks to get you started:
1. Switch Up Your Cards
There is no real benefit to being loyal to a certain credit card. So, if your card isn’t getting you points in a category that can is useful to you right now, then it’s time to change things up. Obviously, you don’t want to lose what you have collected so don’t get rid of your travel card with all of those travel points. Instead, consider getting a cash back card to use in the meantime to access benefits you can use right now.
For instance, consider the TD Cash Back Visa Infinite* Card: it offers 3% in Cash Back Dollars on eligible grocery and gas purchases and on regularly recurring bill payments set up on your account. For everything else, you get 1% cash back. It’s also very flexible, allowing you to redeem Cash Back Dollars anytime, and apply a credit to your card’s balance whenever you like.
The deal gets even sweeter. New Cardholders Earn 6% Cash Back on all Purchases for the first 3 months† up to a total spend of $2,000. Plus, first year no Annual Fee for the Primary and Additional Cardholders†. Conditions apply. Must apply by December 5, 2021.
This offer is not available for residents of Quebec. For Quebec residents, please click here.
†Terms and conditions apply.
2. Choose a Card with Transferable Points/Flexible Rewards Options
Most credit cards limit you to their rewards programs, but some allow you to transfer points, which increases your rewards options. RBC, Marriott, and American Express allow you to transfer points to other loyalty programs, which may be more advantageous to you in the long run.
Additionally, some cards allow you to use your points for a multitude of things. For example, the TD® Aeroplan® Visa Infinite* Card allows cardholders to collect Aeroplan points. Aeroplan points are transferrable and they can be redeemed for a variety of things – not only flights, but also merchandise, gift cards, hotel stays, tickets and events, and more. Credit cards like this offer a lot of flexibility when it comes to redeeming your rewards.
3. Wait for The Big Welcome Bonuses
Some credit cards offer massive welcome offers. These are what you want to cash in on since the best value you will ever get from your credit card is with the welcome bonus. You want to look for deals that offer about double the value that is normally offered (i.e., 30,000 points instead of 15,000) and, ideally, the annual fee will be waived for the first year. The CIBC Dividend® Visa Infinite* Card is a good example: it offers new cardholders 10% cash back (up to $200)* Plus, a first-year annual fee rebate!†
† Conditions apply
Quebec Residents – Learn More about this CIBC product here
Résidents du Québec : Pour en savoir plus sur ce produit CIBC, suivez ce lien
4. Cash In For Gift Cards
Some credit cards require you to make a maximum spend within a certain number of months in order to get those welcome points. For some, that spend threshold can seem pretty high and leave you wavering as to whether or not you actually can spend enough in that time to get that bonus. Well, there’s an easy way around that – gift cards.
If you aren’t sure you can spend that amount of money in the required amount of time, think towards future spending and stock up on gift cards. Buy gift cards for grocery stores, restaurants, and the preferred coffee shop you frequent, plus birthday/wedding/anniversary gifts for friends/family, etc. Gift cards still count as purchases to get you those points, plus you will end up using them rather than stressing and buying random things you really don’t need to ensure you get your points. Remember, the points are the goal, but you shouldn’t be throwing money away to get them.
An example is the American Express Cobalt® Card. You can earn Membership Rewards® points on everyday purchases charged to the card, which can then be redeemed for gift cards at popular retailers (think: The Keg, Sporting Life, Esso, Chapters, Hudson’s Bay, Home Depot). Since there’s no expiry on gift cards, you can use them at your leisure, and ultimately, save money.
5. Double Dip Whenever Possible
Double-dipping may not be a good practice at dinner parties, but when it comes to credit card points strategies, it’s a smart one. Loyalty programs such as AIR MILES, Aeroplan, and SCENE often let you use this strategy. Here’s how it works.
Say you collect Aeroplan points. When you go to make a purchase with an Aeroplan partner, make your purchase with an Aeroplan credit card. Upon checkout, you will be asked for your Aeroplan loyalty card, which will also earn you points. So, essentially, you are getting points twice for one purchase. It’s an easy, fool-proof way to collect your points at a much faster rate.
The same goes for the AIR MILES program. The BMO AIR MILES®† World Elite®* Mastercard® gives you an earn rate of 1 AIR MILE for every $12 in purchases. But you can also earn twice the AIR MILES whenever you use your credit card at participating retailers. Simply scan your AIR MILES membership card and use your BMO AIR MILES®† World Elite®* Mastercard® to pay for the purchase.
6. Make Bonus Categories Work for You
When figuring out how to maximize rewards points, one of the things to consider is the spending categories. You want to focus on the bonus categories – the ones that give you the highest amount of points back per purchase and maximize credit card rewards as much as possible.
For example, many credit cards offer higher rewards for grocery-store purchases. You may think this is just for food-related purchases, but remember many grocery stores sell gift cards for your favourite businesses, from restaurants to Amazon. Use your credit card to buy gift cards at the grocery store for other purchases. It’s a better deal to earn, say, 3% back from purchasing a gift card at a grocery store than just 0.5% when you make the purchase directly at the store.
7. Use Your Credit Card as Much as Possible
How do you earn rewards? We all know the answer – shopping with your credit card. The more you use your credit card, the faster you’ll earn points, so why not use it more? Use your credit card for every purchase you make (whenever possible): from gas to groceries, shopping, paying off bills, and even for a quick milk run to the corner store. Get into the habit of pulling out your credit card first, instead of your debit card or cash. Most credit cards have online apps so you can pay it off immediately after the purchase if that gives you peace of mind. For instance, get into the habit of using your RBC Cash Back Preferred World Elite Mastercard to pay for gas. With this card, you’ll get instant savings of 3¢ per litre on fuel at Petro Canada and 20% more Petro Points when you link your Petro Points with your RBC card.
8. Get More Than One Card
You may be wondering, how many credit cards should you have? The idea of having more than one credit card is daunting to some people; but more than just a rewards strategy, it’s also a smart move. Some places don’t accept certain credit cards (like American Express) and stuff happens — you may lose your credit card or become a victim to credit card fraud. For these reasons, it’s a good idea to have two credit cards on hand.
When choosing your two cards, choose wisely. For example, one card may give you a high earn rate for groceries and dining out while the other may have a more generous earn rate for all spending. Then use these cards strategically to maximize your earnings.
9. Be Mindful of Spend Limits and Rules
Figuring out how to maximize rewards points is a great strategy to have that can end up getting you some amazing deals and saving you money. However, you still need to be mindful of the rules of the game. There’s a lot of small print involved that you need to be aware of. Beware of the following:
- Earning Caps: Many rewards cards have earning caps on their bonus categories. While they definitely aren’t ideal, as long as you are always earning something, they aren’t too bad. But if the earn rate drops to 0% after a certain threshold, well, that’s not in your best interest.
- Changes in Rules: Credit card companies can change the rules, terms, earn rates, etc., whenever they see fit. Take note of all of these changes so you can ensure that your card is still working for you. If it’s no longer beneficial, switch it up.
- Spending Tiers: Another thing to be cautious of is spending tiers. Credit cards will try to lure you with great earning rates, but sometimes those lucrative rates don’t kick in until after you have spent a set amount of money on your card.
- Fees: Many credit cards have annual fees to be wary of. With some of the pricier fees, you’ll need to determine if the rewards you can earn are worth the cost. Additionally, there may be other types of fees involved. Sometimes, you’ll get charged a fee to redeem your rewards.
- Penalties & Expiration: When you’ve worked so hard to earn your points, the last thing you want to do is lose them. Keep an eye on expiration dates as well as any penalties that may cause you to lose points (i.e., late payments, cancelled card, etc.).
Last Words On Maximizing Credit Card Rewards
Coming up with a credit card points strategy is a great way to get the most out of your credit card and make your rewards work for you. From travel deals to cash back, great merchandise and more, taking the time to learn how to maximize your credit card rewards can be very lucrative.
However, as enticing as these rewards programs are, they aren’t for everyone. If you are someone who struggles with paying your credit card on time, always carries a balance, or goes over the credit limit, then rewards cards are not your best option. The interest and penalties you’ll be charged in these cases will wipe out any rewards value you may earn along the way.