Credit Cards Rewards Credit Cards

How to Build Credit Card Reward Points Toward A Specific Goal

Credit cards, when used properly, can be an amazing financial tool. You can use your credit cards to earn free travel and even receive cash back.

Effective credit card use isn’t just about collecting rewards, however. Many consumers just use their cards sporadically, without a real plan for using the accumulated points, miles, or cash back. If you want to get the most out of your credit card rewards program, create a plan to build rewards for a specific goal.

What Do You Want Your Credit Card to Do For You?

Before you get started, you need to have a goal. Too many consumers sign up for rewards credit cards knowing they will collect points, but they don’t really know what they are collecting them FOR. You need to get clear on why you’re collecting points. Some of the ways people use their points include:

  • Earn enough cash back to cover holiday gifts for their children
  • Build up enough miles to get roundtrip airfare for free
  • Collect points to stay at a hotel or resort for a few days

The strategies you use and the credit cards you apply for depend on your goal. Figure out what you want your credit card to do for you and move forward from there.

Research Your Credit Card Rewards Options

Once you know what you want to do, it’s time to research your credit card options. The idea is to find a card that matches your goals. If you want cash back, look for credit cards that offer you higher payouts. If you want to earn airline miles for travel, look for a card that offers extra miles for certain purchases. Loyalty can also be very rewarding when choosing a rewards program. Hotel-branded credit cards can make it easy to earn free stays quickly.

Don’t forget to look into signing bonuses. Many miles and points cards offer a big enough bonus that you can enjoy free travel just on the bonus. It’s common for cash back credit cards to offer bonuses of between $100 and $250. That’s a good start for almost anything you want to save up for.

Research your card options, from rotating category cards to cards that offer extra points per dollar on everyday purchases, to figure out which card is going to help you build points toward your goal faster.

Use Your Credit Cards for EVERYTHING

Once you know which credit cards are going to help you reach your goals faster, it’s time to use them for all of your regular spending. You need to buy groceries, put gas in your car, and make other purchases. Put all of this spending on your credit cards. Set up your utilities to automatically charge your card. Buy all your groceries with your credit card. Pay your rent with your credit card. As long as you pay off your balance each month, you can rack up the points quite quickly. It’s important to keep your credit card spending in line with your budget, though. You don’t want to get into debt.

You can even use your credit card to pay your babysitter or send money to relatives. Using PayPal and Venmo can allow you to send money using a credit card (and getting points). Your service providers receive the money, and you get points for what would normally have been a straight cash transaction.

When shopping online, make use of portals. Many credit card issuers have specific portals that provide you with extra rewards when you shop at specific vendors. Check to see if your preferred retailer is on a portal to supercharge your points earnings. This method can also help you maximize cash back and points for other programs. If you use a rebate program like Ebates or Swagbucks, you can shop through those portals, earn points, and even get extra cashback or rewards to put toward your goals.

Finally, don’t forget that your flexible spending account or Health Savings Account can reimburse you. Before you swipe the debit card associated with your health spending account, take a step back. Pull out your rewards credit card and use that instead. You can reimburse yourself later from the spending account, and you’ve just added more rewards to the pile.

Coordinate Rewards Programs

You can see even faster results if you coordinate your rewards programs. This works especially with cash back credit cards that have quarterly rotating categories that pay out 5%. Use two cash back cards to make this work. Pick one rotating category card and one card that offers a high flat cash back amount (1.5% or 2%). Pay attention to the rotating categories and use your card for those items when they are paying 5% cash back. For everything else, use the card that pays 1.5% or 2% on all purchases.

This strategy works well with points and miles cards as well. Watch for categories that earn extra points toward your cause. Some cards provide extra points for restaurant purchases while others focus extra points on grocery purchases. Coordinate your card use so that you know that each purchase maximizes your earned points.

With a little strategizing, it’s possible to earn rewards faster, and enjoy more free perks more often.

What goals are you working towards with your reward points?

About the author

Miranda Marquit

Miranda is a freelance journalist specializing in topics related to personal finance, investing, entrepreneurship, and small business. Since receiving her M.A. in Journalism from Syracuse University, her work has appeared on a number of web sites including Wise Bread, U.S. News & World Report, Forbes, AllBusiness, and Huffington Post. She writes for the Equifax blog and the Quizzle blog, and has written extensively about credit, retirement, insurance, and taxes for a number of other corporate blogs and web sites. Follow Miranda on Twitter, @MMarquit, and check out her personal finance blog, Planting Money Seeds.

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