Credit cards have evolved beyond being a convenient way to pay for purchases. They now offer rewards in the form of credit card points which allow customers to earn exciting perks and benefits. Each reward program varies, but today, we’ll explain what points are and how they generally work.
What Are Credit Card Points?
Credit card points are a type of reward currency that you can earn by using your credit card for certain purchases. Typically, credit cards award points based on a specific ratio, such as 1 point per $1 spent. Each time you make a qualifying transaction, you accumulate points that can be later redeemed for a wide range of rewards and benefits, adding value to your financial management. Most folks use their credit cards for everyday transactions because they can rack up additional points in specific bonus categories such as gas, groceries, and dining.
In Addition to Bonus Categories, There Are a Couple More Things You Can Do to Expand Your Earning Potential:
Choose the Right Card
Select a credit card that aligns with your spending habits and preferences. If you frequently travel by plane, consider a travel rewards card that allows you to earn points on flight “miles” or hotel bookings. If you frequently travel on land and spend a good amount of money filling up your tank, consider a credit card that gives you 2 or 3 times the points on gas. Say you have a Farm Bureau membership that you pay dues on; consider opening a Farm Bureau® Member Rewards Mastercard® as we’ll pay your state membership dues when you meet the eligible spend requirement.
Introductory Offers
Introductory offers, also known as welcome bonuses, offer “sign-up” bonuses that allow you to earn many points all at once. Typically, you’ll need to meet a certain minimum spend within a specific time frame before you qualify for the welcome bonus. For example, you may receive an offer in the mail for a new credit card offering 80,000 points after spending $6,000 within the first four months of account opening.
Limited Time Offers
Most credit cards have promotional offers that allow you to earn more rewards when spending during a specific timeframe or with particular retailers. For example, your credit card issuer may have a limited-time offer around Thanksgiving or Black Friday, which allows you to earn more points than usual when you use your card during those dates.
Pay Your Balance in Full
To truly benefit from credit card points, paying your balance in full and avoiding accumulating interest charges is essential. Rewards begin to lose their entire value when interest payments offset them.
What Can Points Be Used For?
Statement Credits: A popular rewards category is statement credit. Here a certain number of points are converted into dollars that can be credited to the cardholder’s account. Not every issuer offers this option, so if this is how you’d like to redeem your points, be sure this perk is available to you before applying.
Travel Rewards: Another popular use for credit card points is to redeem them for travel rewards. These rewards can include airline tickets, hotel stays, car rentals, and even upgrades to premium travel classes.
Gift Cards: Many credit card issuers offer the option to exchange points for gift cards from popular retailers and restaurants. This provides flexibility and allows customers to treat themselves or others to various products and experiences.
Events and Activities: From concerts to sporting events, rewards can be redeemed for tickets to the best in entertainment. In addition, points can also be used for hundreds of exciting adventures like helicopter rides and whitewater rafting trips.
Merchandise and Shopping: Credit card points can often be used to purchase items from an extensive catalog of products, including electronics, fashion, home goods, and more.
Charitable Donations: Some credit card issuers allow cardholders to donate their points to philanthropic organizations and causes, making it possible to give back to the community.
Redeeming Your Points
Once enough points have been accumulated, you can redeem them for various rewards and benefits, as mentioned above. The redemption process varies depending on the credit card issuer, but most offer a user-friendly online portal to browse available options and select your desired rewards.
Leveraging Credit Card Points for Back-to-School Spending
With the back-to-school season right around the corner, this is the perfect time to utilize your credit card so you earn more bang for your buck! Here’s how to leverage credit card points for back-to-school spending:
School Supplies: Back-to-school shopping often involves purchasing various supplies like notebooks, stationery, backpacks, and electronics. Using a rewards credit card to pay for these items allows you to earn points while preparing for the upcoming academic year.
Textbook or Technology Upgrades: If you need to upgrade your child’s laptop or purchase a required textbook for one of your college courses, using a credit card can earn you valuable points. Big purchases allow you to earn a large chunk of points in one single transaction, making it a smarter way to pay for these larger expenses vs using a debit card.
Transportation: For college students or those with commuting expenses, using a credit card that rewards spending on gas purchases can be a savvy move. The accumulated points can help you save on future trips or redeem travel-related rewards.
Bottom Line
Credit card points can significantly enhance your financial experience by providing valuable rewards for your everyday purchases, especially during peak spending seasons like back-to-school. Understanding how credit card points work and being strategic in your spending can unlock a world of possibilities – from exciting travel benefits to statement credits and more. Always remember to use your credit card(s) responsibly so you enjoy 100% of the reward benefits that come with it.
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