If you want to get started with credit card rewards, start by determining whether rewards cards are for you and finding the card that best fits your needs. These tips will help.
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Tony Mecia is a business journalist who writes for a number of trade and general-interest publications. Every week, he answers readers’ questions about credit card rewards programs in his “Cashing In” column.
The content on this page is accurate as of the posting date. Some of the offers mentioned below may no longer be available. Please review our list of best credit cards to find our current offers, or use our CardMatch tool to find cards matched to your needs.
How can I get started with credit card rewards?
Start by determining if rewards cards are for you and doing some research to find a card that best fits your needs. Just make sure you don’t overspend or carry a balance at the end of the month for the sake of earning rewards.
Dear Cashing In,
I was talking to my nephew at Halloween, and he was saying that he’s flying to Europe for the second time this year for free using miles from a credit card.
That seems astounding to me because he’s only 30 and can’t be spending that much to get those miles. Is that really possible? And if it is, how would I start doing something like that?
I have two cards that I have had for the last 10 years. – Dan
When people first hear about credit card rewards experiences like those of your nephew, they figure there must be some catch.
It’s like talking to somebody who has just come back from Las Vegas – they will gladly tell you in detail about the $200 they won at the blackjack table, but you always wonder what portion of the story they are omitting, like all the money they lost the night before playing roulette.
With credit cards, there actually are legitimate ways to come out ahead and have enough miles or points to take trips using your accrued rewards.
There are a few potential downsides, it might take some work to understand, and it’s not really “free.”
But there’s no doubt that it is possible to do precisely what your nephew is doing, and you don’t have to be making a six-figure salary to get some of the benefits.
Here are six steps you can take if you’re interested in getting going with reward cards.
See related: How to score more rewards with your holiday shopping
1. Determine if reward cards are for you
Do you pay your bills on time and in full each month? Do you have time to research, understand and manage a few new credit cards? Do you feel comfortable with having a few additional credit card accounts open? Do you have excellent credit?
If you can answer “yes” to all of those questions, then reward cards might be appropriate.
Conversely, if you are not in a position to pay off credit card bills, you’re not able to delve into the details of these programs, or you’re nervous about having multiple cards, you might want to hold off.
See related:What is a good credit score?
2. Do your research
There are plenty of places on the internet to find information about different rewards cards, including blogs, travel websites, bulletin boards and of, course, the banks’ websites.
Some might get too detailed for beginners, such as certain travel sites, while others might give you a very preferential picture of certain cards, including bank websites. Start by getting familiar with the basics of credit card rewards and exploring card options that might fit your credit profile and spending habits.
- CreditCards.com’s CardMatch tool can help. It lets you compare the basic attributes of different cards that may match your credit profile in one place.
- You could also talk to people with experience in the “rewards game,” like your nephew, who might have suggestions.
3. Consider what you want
Some people love the flexibility of earning cash back. Others like frequent flyer miles or points that can be used for travel. Some people love cards with huge sign-up bonuses and discard them within a year, before an annual fee comes due. Others look for cards that allow you to rack up lots of points with daily use. Or they use a combination of those strategies.
Ask yourself what you want to use your points or cash back for and what strategies you’d feel comfortable adopting.
4. Start small
Don’t apply for a bunch of cards all at once. Dip your toe in the water by finding a card you like and trying it out for a few months to understand how it works, both in terms of earning points or miles and redeeming them.
For all that you can read about how cards work, there is no substitute for actually having to do it.
See related:What’s in my wallet: My cash-back strategy
5. Shift spending to your card(s)
Major cash back cards will give you between 1 percent and 2 percent back, and they can give more on spending in certain categories, such as groceries and travel. Travel cards can yield even higher returns.
In contrast, money you spend from your checking account in the form of cash or checks earn you no rewards.
That means that you should try to shift as much of your spending as possible onto rewards cards – as long as you’re not paying any extra to do that or using rewards as an excuse to buy more than you should.
See related:Best credit cards for groceries
6. Keep your eyes open
If you haven’t looked at credit cards in the last decade, you should know that there has been plenty of innovation and new offers.
You should regularly check and see what’s out there, because some of the newer offers are probably superior to those of an old card.
Who knows – some day, you might be traveling with that jet-setting nephew of yours!