6 Tips for Playing (and Winning!) the Reward Credit Card Game

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winningstrategysmCredit cards can be a double-edged sword. When used irresponsibly, you can easily bury yourself in debt. But when used responsibly, they can be powerful tools.

Benefits of credit cards include price protection, extended warranties, and cash back (or other) rewards. Today, I want to focus on the latter. What follows are six tips for playing (and winning!) the reward credit card game.

1. Use multiple cards

While you may be tempted to find “one card to rule them all,” you can do better by carrying a combination of cards. Indeed, with the relatively widespread adoption of rotating reward categories, having two or three cards will allow you to maximize the number of purchases earning 5% cash back.

Of course, having a solid all-around card for non-bonus purchases is a good idea. And because Discover and American Express aren’t as widely accepted, you always have a Visa or MasterCard in your wallet is a good idea.

2. Enroll your cards

A byproduct of the aforementioned rotating reward categories is that you need to re-enroll you card(s) each quarter. While some issuers have experimented with auto-enrollment, that hasn’t caught on. The good news is that it’s quick and easy to do this yourself.

Something else to be aware of: enrollment is retroactive for some programs, but it’s not for others. Thus, while you can sometimes get away with enrolling near the end of the current quarter in some cases, failing to register early could be costly in others.

The solution here is simple. Just put a reminder on your calendar to check this on the 1st of January, April, July, and October.

3. Mark you cards for use

Of course, being enrolled in the various programs doesn’t help if you don’t use the right cards at the right place. I thus highly recommend marking the relevant categories in the upper corner of your cards with a fine-point marker.

This is especially helpful if you have a spouse who is less — hmmm… motivated? obsessive? — when it comes to maximizing credit card rewards. And yes, the ink will come right off with a bit of alcohol when the categories change.

4. Time-shift your spending

Given the quarterly nature of some reward programs and the annual spending tiers associated with others, there are times when you’re just short of maxing things out and time is running short. Of course, you don’t want to go out and blow money just for the sake of rewards. That would be foolish.

Instead, consider time-shifting some of your purchases by purchasing relevant gift cards. For example, if your card is offering 5% cash back at gas stations but the promo is about to expire, you could lock in the discount by picking up some gift cards on your next visit to your preferred station.

5. Stretch your grocery rewards

Related to the above, it’s not uncommon for credit cards to offer generous rewards at grocery stores. And most grocery stores nowadays sell gift cards for all kinds of things. Restaurants, department stores, home improvement stores, and the like.

If you know you’ll be spending a chunk of money at one of these stores, why not pick up some gift cards at the grocery store beforehand? This will allow you to stretch those grocery rewards to other facets of your financial life.

And yes, this works. The card issuer only sees where you shopped and what you spent. They have no idea what you’re buying.

6. Take advantage of redemption bonuses

While straight cash back is generally the most attractive reward, you can sometimes do better with a store gift card. In fact, some issuers have special deals where they offer 10%-20% bonuses if you redeem your rewards for gift cards at certain stores.

Of course, this is only a good deal if you’d otherwise be spending money at one of the “bonus” stores. But if you are, you can stretch your rewards even further by taking advantage of these sorts of deals.