Get the Most Out of Your Credit Card Rewards Points This Summer

Summer is a time when many of us like to get out and about, taking road trips, attending festivals and community events, and trying new activities. But all of that fun can come with high price tags.

Credit card rewards can offset some of these costs, but you need the right strategy if you hope to maximize what you earn. Here are some tips to help you get the most out of your credit card rewards points and miles this summer.

Choose the right credit card for your spending

Each credit card has its own rewards system. Some offer points you can redeem for cash back and gift cards. Others earn you miles you can use on travel purchases. They also vary in terms of how much they reward spending in various categories. Most purchases earn 1 point or mile per $1 spent, but some cards offer extra rewards in bonus categories.

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Choosing a card that offers bonus rewards in your areas of greatest spending is one of the best ways to maximize your rewards. For example, if you’re spending a lot on gas because you’re driving more, use a card that gives you extra cash back or miles on gas purchases.

This requires you to be strategic about which card you use for which purchases and you may even want to open a new rewards credit card if you realize it could offer you greater earning potential. Just be careful not to apply for new credit too often. Limit yourself to opening a new card every six months or so.

Go for a new sign-up bonus

If you plan to make a big-ticket purchase this summer and you’ve been eyeing up a new credit card, now might be a good time to open it, especially if it offers a sign-up bonus.

Sign-up bonuses are large numbers of points or miles new cardholders can earn by completing qualifying activities — usually spending a certain amount — within the first few months of card opening.

If you’re planning a summer vacation, for example, worth several thousand dollars, you could easily earn some credit card sign-up bonuses in a single month. Then, you can redeem those rewards on additional purchases throughout the summer.

But before you do this, make sure the bonus is achievable for your spending and that you like the card’s regular perks. Remember, you’ll still have the card long after earning the bonus. If it doesn’t appeal to you, shop around for better options.

Choose your redemption options carefully

Most credit cards offer several redemption options. For example, cash back cards enable you to apply your rewards as a statement credit, redeem them for gift cards, or even pay with points directly at select retailers. Travel rewards cards let you use your miles on flights, hotels, and other travel-related purchases and some enable you to transfer your points to partner programs as well.

But these redemption strategies aren’t all created equal. You might get a lower dollar value per point if you choose to pay with points compared to redeeming for a statement credit or a gift card, for example.

Compare all your options and see which gives you the greatest dollar value for your points. Choose this option unless you have a very good reason for choosing a different one.

Keep in mind that some points or miles may have expiration dates. Check with your card issuer if you’re not sure how this works. Aim to use your points before their expiration date whenever possible.

Watch what you spend

If you want your credit card rewards to work for you, paying your balance off in full each month is essential. If you carry a balance, the interest charges you’ll pay could easily exceed what you’re earning in rewards each month.

In this case, it might be best to use your points to pay down your debt when that’s an option. Try to limit your charges to your credit card to avoid increasing your debt further and consider a balance transfer card or a personal loan to help you wipe it out for good.

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