Consumers are obsessed with rewards. We crave them, want them, love them. We obsess over how to burn, churn, trade, convert, and optimize them. We get a rush of adrenaline when we collect them, satisfaction when we redeem them.

Banks are competing hard for your wallet, and we have a few tips on how to exploit their appetite for growth so you can fly free, sleep free, float free, drive free, and more.

1. Get A New Card

Loyalty doesn’t pay in credit cards. Just like wireless and cable, you’ll get the most value from your credit card when you switch providers and get a new card.

Want proof? With your current card, it might take you 2 years and $25,000 of spending to earn 25,000 miles. Get a new credit card and you could get a 25,000- to 60,000-mile sign-up bonus in as little as 3 months, requiring only $500 to meet the minimum spending requirement.

2. Try Before You Buy

Before you buy a new car, you take it for a test drive, right? Same with a pair of shoes? Of course. That’s why you should only get a new rewards credit card with an issuer that doesn’t charge an annual fee in the first year. This will give you the chance to try out their product and make sure you’re happy with things like their customer service, ease of rewards redemption, online billing and payments, credit line, etc. It makes trying risk-free, and puts the onus of performance on the issuer, not you.

3. Wait For The Big Promotion

Issuers have special welcome bonus promotions all the time. Quite often, they don’t make them available on their website or to the general public. Search through credit card comparison sites, travel reward blogs, and Google search to see if they’re advertising any limited-time offer welcome bonuses, the wait will be worth it.

4. Know Your Categories

Many rewards credit cards offer bonus points when you use your card at the gas pump or grocery store. There’s a way for you to hack bonus points in even more merchant categories. Simply use your credit card at the grocery store to buy a gift card to your favourite merchant (Wal-Mart, Amazon, Apple, Home Depot, etc.). You’ll get your bonus rewards or cash back because you made your purchase at the grocery store, and then you’ll be able to use your gift card at your favorite store.

5. Stack Your Credit Cards

Maximize your rewards by using multiple credit cards with different bonus categories, so that you get a bonus on all your spending.

For example, you can use one card to get 5% cash back on gas and groceries, another to get 3% back at restaurants, another to get 3% at the pharmacy, and yet another card to get 2% cash back everywhere else.

6. Know The Rules Of The Game

Credit card companies are a little like casinos. They offer you all the promise in the world, but they lay a few land mines in the way to stack the deck in their favour. Here are a few things to watch out for:

  • Rotating Categories: Some cards change their categories month to month or quarter to quarter. To get any real value from the card, you have to be willing to stay on top of the rotations and re-select your categories frequently.
  • Earning Caps: Make sure you know if there are any caps on rewards earnings. If there are, it makes no sense to spend beyond the cap, because you’ll either earn less or no rewards from the additional spending.
  • Rule Changes: Credit card terms and conditions change all the time — most cards have an obligation to notify you of any changes. Read your mail, or you might miss the memo.
  • Penalties: Know where the land mines are laid. Do you you lose your points if you cancel your card or miss any payments?
  • Expiration: This can be a killer. Know if your points have an expiry date or if they expire upon cancellation of your card.
  • Carrying a Balance: If you carry a balance, your interest payments will wipe out any value you get from your rewards.
  • You’re late: Being late wipes out any value created from your rewards. You’ll be charged a late fee, your interest rate will skyrocket, and you’ll lose the privilege of your grace period.

Featured photo credit: money-256314_960_720 / jarmoluk via pixabay.com

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