How to get the most out of your credit card rewards

This content is sponsored by PenFed Credit Union, federally insured by NCUA

Credit cards with rewards programs seem ubiquitous. You may be bombarded with credits cards ads boasting rewards where cardholders can earn points they can use for travel, hotels, cash back, dining or gift cards and merchandise. So are these rewards really worth it? And how do you get the most out of the rewards credit card you have?

Rewards credit cards can be a good way to get the most out of your everyday expenses. Users merely need to spend on their card to earn points that they can turn into rewards. However, it can require some research to make sure you understand the limitations some cards have, the methods to accumulate points faster and the ways to earn the rewards that best suit your life.

The best rewards credit cards are worth more than $2,000 in savings for the average person over the first two years of use, after annual fees, WalletHub reports.

To get your rewards credit card’s worth, it is important to maximize the offerings and understand the fine-print that can be associated with them.

The first step in doing that is making sure the card is a good fit for your life and your interests, according to the experts at PenFed Credit Union. For example, if you enjoy travel, it makes sense to gravitate toward a card with good airline or hotel points; however, if saving your money is more appealing, you might find that cashback rewards are a better option for you.

It’s also important to make sure the rewards justify the potential annual fee. Some rewards credit cards carry fees – so you have to ensure you’ll get more out of the card than you pay in the fee, NerdWallet reports. For example, if the rewards credit card comes with a $100 annual fee – so make sure it’s worth that cost.

Another way to get the most of your rewards credit card is to manage your points effectively. PenFed Credit Union recommends checking your rewards balance a few times annually and paying attention to when rewards expire, if there are reward caps, how many points you have and what they can be used toward.

“Remember to check when planning your annual vacation and as the holidays approach — it’s a great way to take the edge off a big purchase,” PenFed Credit Union’s experts said.

You may find that to make the rewards credit card worth it, you will need to use it a lot. NerdWallet noted that some rewards programs require users to collect a minimum number of rewards points before they can be redeemed.

With any credit card, it’s important to be aware of spending compared to your ability to pay off the card quickly. The same goes for rewards credit cards.

“Running a balance on your card means you’ll end up paying high-interest charges that offset what you gained in rewards,” PenFed Credit Union said.

It is important to be informed about the credit card’s perks such as if there are special discounts or bonus offers available to cardholder as well as if there are bonuses offered seasonal or quarterly. If seasonal or quarterly bonuses are in the mix, consider timing big purchases around them to receive the most points you can, PenFed Credit Union said.

Research online shopping portals that can help you earn even more points with your credit card, PenFed said. Many airlines and major retailers have their own portals that can add additional rewards points to your credit card purchases.

“Some portals offer better returns than others, but you can find the best bonuses using Cashback Monitor to compare rewards across multiple portals,” PenFed said.

Read more about maximizing your rewards credit card on PenFed Credit Union’s website. PenFed Credit Union is federally insured by NCUA.

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