If you have a rewards credit card, you want to make the most out of your rewards right? This is what I call ” Maximizing your rewards“. To do this you want to rack up as many points or miles as possible, without getting hit with interest or going into debt, which would in effect cancel out the benefits any rewards might earn you.
So how can you maximize your rewards each month? Why not kill two birds with one stone by paying off bills you would be paying off anyway, all the while earning those sweet rewards points you’ve been craving. The key to making this work of course is having the discipline to pay off the entire balance in full every single month without fail, so that you do not pay a dime in interest. Interest is the bane and the enemy of rewards points maximizers. The reason being lets say you earn $40 in rewards for a month of light spending, but you pay only the minimum payment on the bill. You get slammed with $43 dollars in interest, which cancels out your gain in rewards. Even if you wouldn’t have interest that high, it will cut into your earned rewards substantially.
If you tend to carry a balance every month being a rewards maximizer might not be in the cards for you. This is especially true if you tend to struggle with debt. If this is you read these tips and save them for a time in your life when your finances are under better control. The entire key to maximizing your rewards rests on being able to pay off the entire balance in full every month, so a revolving credit balance makes this pointless in the long term.
The premiss of maximizing your rewards is pretty simple, spend as much as you can on your plastic, then pay that balance in full each and every single month. It is easy to slip and carry a balance over into the next month, which is why you need self discipline to not slip up. You can start by using your plastic to pay for gas, groceries and dining out, but that alone will not rack up those sweet rewards you crave. You can branch off further by paying bills with your credit card. You are going to be paying those bills anyway so you may as well gain some rewards while doing so. While you likely cannot pay all of your bills on credit, there are many bills that you can pay with credit. You cable company, cell phone, many utility companies even allow you to pay your bills with plastic. Most medical bills can also be paid with plastic, as can most insurance bills. You will find that many of your bills can be paid off with your credit card.
Now there is a downside that you need to be on the lookout for. While many companies will accept plastic, some will charge you a fee for the so called convenience of using plastic. If you run into this, skip future bill payments on plastic for these companies. If for example your cell phone carrier charges you 3% to pay with plastic, but you are only earning 2% in rewards, you are actually losing 1% by paying with plastic. Some landlords will take plastic, but it is much more common for condo associations to accept credit card payments and without fees attached. Also do not bother using 3rd party services that take plastic to pay your mortgage or rent, as these services come with fees, and these fees of course cancel out the benefit of your rewards.