Eight credit card strategies for savvy shoppers

a woman grocery shopping

Being a savvy shopper when using credit cards doesn’t mean being perfect – it means making your credit cards work for you. This calls for identifying cards that best align with your shopping habits, maximizing rewards and leveraging below the surface perks. It takes just as much strategy as it does knowledge. Read on to discover eight strategies savvy shoppers employ when using rewards credit cards.

1. Select the best everyday use card and start stacking rewards

If you want to start earning rewards right away, be sure to select a rewards credit card with cash back savings in everyday shopping segments, such as groceries, gas and home improvement. When it comes to grocery shopping and dining, Business Insider reports that the American Express® Gold Card is one of the best in this category. You earn 4X membership rewards when you use the card at restaurants and in supermarkets. You’ll be making these purchases anyway, so you might as well choose a card that gets you the most value.

2. Time purchases with your credit float in mind

The essence of a credit card is that you can purchase something now and pay later. Each month, you’re given a grace period that covers the days between the end of your billing cycle and your payment due date. You won’t incur interest penalties during this period. And if you time your purchase just after the end of the billing cycle, you’ll have nearly two months to pay the amount off without interest.

3. Earn rewards by paying your bills

You can’t escape paying your monthly bills, but with the right cash back card, you can reap rewards for doing so. Instead of drafting your bills from your checking account, use a card like Chase Sapphire Reserve®, rated as having the best overall rewards program in 2019 by Business Insider. For example, if you spend $4,000 within the first three months of opening an account, you’ll earn 50,000 rewards points, which can be cashed in for a variety of rewards, including a $750 travel credit. That’s not too bad for simply paying your bills!

4. Take advantage of low-rate credit offers when looking to borrow or transfer a balance

While loan interest rates fluctuate throughout the year, you can often lock in great low rates or even options without interest using the appropriate rewards credit card. Look for balance transfer cards offering 0% APR for the year following the opening of your account. You may still incur a one-time fee of three to 5%, but it’s still a good alternative to a personal loan.

5. Use business credit cards wisely

If you’re planning to use credit to build up your business, consider two things: First, open a rewards credit card account in the name of your business. This will keep it separate from your personal account and not affect your credit rating.

Second, choose a business credit card that helps build a return on your investment. For example, the Discover it® Business Card offers account holders unlimited 1.5% cash back on all purchases, as well as an unlimited dollar-for-dollar cash back match of all of the cash rewards benefits you earned throughout your first year with the account.

6. Capitalize on one-time rewards

Rewards credit cards frequently offer a one-time signup bonus after you open a new account. When shopping around for a new credit card, look for one that features a gift card after your first purchase, or a hefty amount of bonus points for simply using your card frequently in the first few months. As mentioned above, the Chase Sapphire Reserve is a great rewards credit card that features an incomparable one-time reward.

7. Use credit for large purchases

Rob Berger, Deputy Editor of Forbes Money Advisor and personal finance author, suggests that one of the best ways to maximize your cash back rewards is by using your credit card for large purchases. In his case, Rob paid off his child’s school tuition using a rewards credit card, upon which time he received a discount from the school for paying in full. This was in addition to 2% cash back from his credit card company. Larger price points equal larger cash back amounts. Just be careful not to exceed your credit limit.

8. Find the rewards card that aligns with your interests

If you’re a frequent flyer, or tout a good amount of brand loyalty, consider applying for a rewards credit card that takes those interests into consideration. Look for a card that pays 2% cash back or higher on the purchases you make most frequently. Keep an eye out for companies that prioritize points toward travel, flights and hotel stays if that’s your niche.

Take inventory of your financial situation

To ensure you’re making the best decisions when it comes to your rewards credit card accounts, stay on top of your credit score and the latest credit card offers. If you practice savvy credit card usage, you’ll reap more rewards. 

Quotable source: Rob Berger, Forbes Money Advisor, https://www.doughroller.net/about/, https://www.doughroller.net/contact/