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It’s midyear: How’s your credit card rewards strategy going?

Take stock of your 2019 rewards plan, whether you’re behind, on track or have already met your goal

Summary

Whether you entered 2019 with a plan or just a general idea of how you wanted to meet your rewards goals, now is a good time to revisit them and evaluate how you’re doing. Here are some steps you can take to evaluate how you’re doing and what you can do to stay or get back on the right track.

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If you’re looking to plan a vacation, buy a big-ticket item or achieve some other goal with your credit card rewards, having a strategy for how you’re going to do it is essential.

Whether you entered 2019 with a written plan or just a general idea of how you wanted to meet your rewards goals, now is a good time to revisit them and evaluate how you’re doing.

Here are some steps you can take to evaluate how you’re doing and what you can do to stay or get back on the right track.

Revisit the goal

The entire purpose of a credit card rewards strategy is to achieve a certain goal. But if that goal is vague or unreasonable, you may be setting yourself up for failure.

For example, booking a vacation at the end of the year with rewards is an excellent goal. However, not having any concrete plans or hoping for an extravagant trip could make it difficult to make it happen.

“The best points and miles to earn and, therefore, the best credit card to apply for will change depending on the exact destination, among other factors,” says Stephen Au, a points contributor to the rewards website UpgradedPoints.

If you hope to visit Paris, for instance, take a look at how many points or miles it’ll take to book your flight and hotel and which airline and hotel brand you want to use. If you’re getting a rental car, compare prices to see how much it might cost in terms of rewards.

With specific numbers in mind, you’ll have a better idea of exactly which credit cards to sign up for (if necessary), how much you need to spend to earn the required miles and when you’ll need them to complete the itinerary.

The clearer and more attainable your goal, the easier it will be to plan a way to achieve it and track your progress.

See related:  5 creative ways to redeem credit card rewards

Know where you stand

Once you understand what needs to happen for you to execute your rewards strategy, take some time to track your progress so far.

If, for example, you’re trying to rack up cash back rewards to use for holiday shopping, it can be as simple as checking your rewards balance and comparing it with a rough holiday budget. The same goes if you’re hoping to make a large purchase using only rewards.

If you’re racking up travel rewards to help cover the cost of a trip, you’ll want to make sure the redemption amounts haven’t changed for your flights, hotel and rental car since you first checked. Then look at your travel rewards balances to find out where you are with each aspect of the vacation.

“It’s easy to evaluate how things are progressing when everything is noted down,” says Allan Liwanag, author of the personal finance blog, The Practical Saver.

“For tracking, I use a spreadsheet, which lists the cards we carry, total rewards, requirements to hit a bonus and when the annual fee for a card hits,” says R.J. Weiss, a CFP and author of The Ways to Wealth financial blog.

Weiss is currently working on using rewards to cover a summer 2019 trip to Colorado and a spring break 2020 trip to Costa Rica with his family.

If you’re behind, you’ll know exactly how much you need to earn to get to where you want to go.

Think about the next steps

Once you know where you are with your rewards strategy, think about what you need to do to finish what you started.

If you’re behind

If you’ve realized during the process that you have some catching up to do, consider whether you need to adjust your goal to make it achievable. The last thing you want is to spend more time working toward a goal, only to realize at the last minute you’ve failed.

If you still think you can make it happen, though, draw up a plan for how you’re going to do it. For example, consider whether you need to shoot for a new sign-up bonus or adjust how you’re using your credit cards. You may need to focus more on one rewards program or simply maximize your rewards on every purchase regardless of which program you’re earning them in.

Liwanag also recommends using a buddy system, if possible.

“I would advise couples to be authorized users of each other’s cards,” he says. “If [they] have different credit cards, there are more opportunities to gain rewards when they add each other as an authorized user on their cards.”

If you’re on track

If you’re feeling good about your progress so far, avoid getting complacent. Make sure you know exactly how you’re going to bridge the gap.

If you can do it with your current spending habits, it may be smooth sailing from here on out. But if you have an aggressive goal and need the help of a new sign-up bonus or two, plan out how you’re going to get them in time.

If you’ve already completed your goal

It’s possible your 2019 credit card rewards strategy revolved around a summer vacation or a large purchase you’ve already made. If that’s the case, start thinking about your next move.

For example, are you thinking about planning another big trip next summer? Or do you have something else in mind you’d like to save up for?

You may think about taking a break from focusing so much on your credit card rewards. But you may end up leaving money on the table if you go too long without a plan, says Au.

“You always want to have a strategy in the back of your mind when earning credit card rewards,” he adds.

“I try to plan ahead 12 to 18 months ahead,” says Weiss. “This allows me to have ample time to earn the points and see what type of availability is open 12 months before I want to take the trip.”

See related:  How I stay organized with travel credit cards and loyalty accounts

Tips for maximizing credit card rewards

If you’re feeling stuck with your rewards strategy, here are a few general things you can do to help squeeze as much value out of your credit cards as possible.

  • Use multiple credit cards to take advantage of bonus rewards on different spending categories.
  • Diversify your rewards to enhance your portfolio and avoid getting blindsided by program devaluations.
  • Don’t forget about valuable credit card perks when picking a new card or leveraging an old one.
  • Be mindful of annual fees when calculating the net benefit you receive from a rewards credit card.
  • Pay your balance on time and in full each month to prevent interest charges from eating into the value of your rewards.

Also, Liwanag recommends reviewing all of your credit cards from time to time for updated benefits and rewards. A card that may not have been in your primary rotation six months ago may now deserve a spot.

As you use these tips and a more defined strategy based on what you want to achieve with your rewards, you’ll be in a better position to accomplish your goal.

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