8 tips for choosing bonus categories on your rewards card

Here's how to maximize savings when your card lets you pick your bonuses

When you have to choose bonus categories on your rewards credit card

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It’s the choose-your-own-adventure of the credit card rewards world.

Some credit cards let consumers and business owners select from a menu of categories for their bonus rewards. If, for example, you eat out frequently, then you can boost your rewards for dining. However, if the grocery store is where your money goes, that’s also where you’ll rack up the points.

But making the right choice is key: You need to pin down, in advance, the locations where you’re going to spend the most – and know exactly how those purchases are going to be processed by your credit card issuer.

Otherwise, you might be missing out on cash back or points.

Up to the challenge? Here are eight things you need to know to get the most rewards for your spending dollar when you choose your categories:

See related: Best cards for restaurantsBest cards for grocery shoppingBest cards for gas

Choosing your own rewards cards bonus categories: 8 tips

  1. Understand your cards rewards structure: Some cards offer a combination of fixed and rotating categories; make sure to learn how yours works.
  2. Know when to select your categories: Some cards let you choose each quarter, while others do so annually.
  3. Look at past transactions: Year-end summaries are a great tool to decide which categories might fit your spending best.
  4. Don't forget seasonal or sporadic spending: Taking a comprehensive look at a full year of expenses makes it easier to pick categories.
  5. Look at how transactions are categorized and make sure to know exactly how your purchases are coded.
  6. Stay on top of your issuers communications: Mobile and email alerts can help you maximize savings.
  7. Ask for help with one-time misclassifications: Your bank might be willing to offer you goodwill points on one-off purchases wrongly coded, if you ask.
  8. Look at spending limits: Some bonus categories come with charging caps; make sure your picks give you enough wiggle room.

1. Understand your card's rewards structure

Start by learning how often your program requires you to select card reward categories and what happens if you don’t.

“Some programs allow you to set it once and it’s on,” says Jon Groch, executive vice president and director of payments for BBVA Compass. With others, you’re good for a quarter, then everything reverts back to a baseline – which could be one point per $1.

And if you have different cards, the rules can vary.

As an example, here's how the rewards structure of three different cards that let you choose your bonus categories works:

A few cards that let you choose bonus categories, at a glance

Compare cards' rewards structure:  

SimplyCash® Plus Business Credit Card from American Express

Rewards structure
  • 5% cash back on the first $50,000 spent at wireless telephone services purchased directly from U.S. service providers and U.S. office supply stores.
  • 3% cash back on the first $50,000 spent in the category of your choice from a list eight categories selected annually, including airfare, hotels, car rentals, gas stations, restaurants, shipping services, advertising and computer hardware/software/cloud purchases.
  • 1% cash back on other purchases.

U.S. Bank Cash+ Visa

Rewards structure
  • 5% cash back on two categories of your choice ($2,000 purchase limit per quarter), including sporting goods, bookstore and department store purchases.
  • 2% cash back (unlimited) on one everyday bonus category, such as gas or restaurant purchases.
  • 1% cash back on other purchases.
  • Category options rotate every quarter, and may include gym memberships, cellphone plans, movie tickets, car rentals, fast food, electronics and more..

Business Gold Rewards from American Express OPEN

Rewards structure
  • 3 points per dollar spent on a category of your choice (first $100,000 in purchases yearly).
  • 2 points per dollar spent on four remaining bonus categories (first $100,000 in purchases yearly).
  • 1 point per dollar spent on general purchases.
  • Five different bonus categories to choose from: airfare, advertising, gas stations, shipping and computer purchases.

2. Know when to select your categories

“Don’t go back to 1 point for every dollar spent” just because you forgot to select your categories, says Groch.

Instead, put a reminder in your calendar program, he suggests. With some cards, such as the BBVA Compass Select, you choose categories quarterly. Others, including the American Express Business Gold Rewards card, let you select them annually.

BBVA and several other banks will send you reminders, but life gets crazy, and sometimes mail ends up in the junk file. So, set a reminder to yourself, just in case.

Tip

Tip: Create a notes file (on your phone or tablet), with the bullet points for your various business and personal cards’ rewards structures. That way, you have the information at a glance, if you need it.

3. Look at past transactions

The best predictor of how you’re going to spend money tomorrow is how you spent money yesterday.

 

Video: Credit card reward hacks

Log into your account and scroll through those past transactions. Are you eating out a lot? Or is the grocery store or gas pump your big spend every week?

Your transaction record “gives you a good baseline,” says Groch. “Really use it based on what you’re spending.”

Ditto for business rewards, says Gina Taylor Cotter, general manager of global commercial financing for American Express. Take a comprehensive look at your business expenses to make sure the categories you choose cover all points on your budget.

With American Express cards, consumers can download a PDF or Excel file that will document card spending for the month or the year, says Cotter. And they can go back as far as two years.

Other issuers that offer year-end summaries include Capital One, Chase and Citi.

4. Don't forget seasonal or sporadic spending

Spending changes seasonally, too.

  • In July and August, you might spend more at bookstores, office supply stores and children’s clothing retailers.
  • In November and December, you could find yourself eating out more as you gear up for the holidays.

The key here: Don’t just look at what you spent money on last month. Look at what you were spending money on at this time last year, too. Many cards will put at least one year of transactions online. So a few keystrokes can tell you what you need to know.

The same with business credit cards, which will have bonus rewards categories geared toward business needs. One example: The Business Gold Rewards Card from American Express OPEN lets business owners select from categories such as advertising, shipping and travel.

If you didn’t do much advertising last year, but know your budget is changing, that’s also a point to keep in mind when you choose rewards categories.

Tip

Tip: If some quarterly categories on your cards don’t match exactly your budget needs, you can still try a few strategies to take advantage of them. Stocking up on items that won’t spoil or buying gift cards to use year-round are just two ways of maximizing rotating categories regardless of your spending habits.

5. Look at how transactions are categorized

Groch admits this tip is especially for rewards card nerds. But it can help everyone.

Retailers and merchants choose how they are categorized for the purpose of card transactions. And those categories might not be what you’d expect.

That’s why paying for gas inside the mini mart might net a line item charge under “grocery store,” while paying at the pump might come to “fuel.”

If you’re counting on spending a lot of money at a certain retailer, check to see how your card classifies that merchant before you select those categories. It may not be classified the way you think.

“People should look at their records and see how they’re earning their rewards,” says Groch.

Tip

Tip: Many cards don’t let you change categories midquarter if you discover you’ve made a mistake. But you can test out that classification before you pick. Go to the merchant in question and buy something small. Then check your online account and see exactly how that purchase is tagged.

6. Stay on top of your issuer's communications

“Make sure you’re looped in on all the ways your card issuer can communicate with you,” says Brian Murphy, vice president with the American Bankers Association.

And that includes phone, email and text. Receiving alerts or updates about rewards and bonus categories will ensure you’re on top of any opportunity to maximize savings.

Log in to your account regularly online, too.

Not only does that allow you to keep up with the account and make sure all the charges are correct and genuine, but you’ll also see bonus point offers and reward categories, Murphy says. And you might see categories “you can use that you wouldn’t know about otherwise.”

Tip

Tip: Not only can mobile alerts tell you within minutes if your card is used in another country or if your payment is overdue. They can also help you track your rewards and spending habits more efficiently. Here’s how to sign up for bank alerts on your cellphone.

7. Ask for help with one-time misclassifications 

No, your card issuer is not going to reclassify 16 tanks of gas you bought at the pump outside your favorite big box store.

But one expensive trip to the home improvement store that popped up under the wrong merchant category? You might be able to get some help.

Card issuers know that sometimes merchant categories don’t align precisely with expectations – or real life.

“If you’ve made a large one-time purchase, thought you were going to earn a bucketful of points and didn’t, call the issuer,” says Groch.

It may be they’re willing to give you those “goodwill points” and make that up to you, he says. But see it as a one-time courtesy, rather than a remedy for selecting the wrong category.

"If you’ve made a large one-time purchase, thought you were going to earn a bucketful of points and didn't, call the issuer."

8. Look at spending limits 

With some cards, you get extra points in a category – up to a certain spending limit. After that, you go back to the default rate (often 1 point per $1).

Other cards, such as BBVA’s Compass Select, don’t have spending caps on rewards categories.

In other cases, there is a cap, albeit a generous one. With SimplyCash Plus, for example, business owners get bonus rewards until they spend $50,000, then they earn 1 point per $1 on everything.

It pays to be aware of those spending limits, so you know exactly how many points you can earn.

See related: Best cards for sign-up bonuses, Which reward is better: cash back or travel?


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Updated: 12-15-2018