It’s the sad truth that many credit cards are not used to their full potential. If you’re a little overwhelmed with which credit cards to use to maximize your rewards in 2022, you’re not alone. To make the most out of your money, you’ll want to know how to maximize credit card benefits.
Over the past few months, credit card companies have announced plenty of changes to address spending behaviors that involved less travel and more time at home than before. Everything has changed with the return of travel.
Here’s a general guide to ongoing COVID-19 related benefits and bonuses.
Prioritize Cards that Offer Rewards on Several Categories
This is a great time to earn lots of points to travel. For example, many cards offer limited-time bonus points on categories that relate to purchasing locally. This means it’s a good idea to pay attention to category changes, then max them out on an existing card you may already have in your wallet.
In July 2021, American Express announced new Platinum Card benefits and a hefty welcome bonus. By spending $6,000 within the first six months of opening your account, you will earn 100,000 Membership Rewards points.
Amex has also added up to $200 in hotel credits, up to $179 in fee credits for Clear, a $240 digital entertainment credit, up to $300 credit for eligible Equinox subscriptions (registration required) and other new benefits. One thing that is worth noting, the annual fee for the Amex Platinum card has been increased from $550 to $695.
Many card issuers show you how much you’re spending by category so you know where you regularly spend. You can use that information to decide to swap out one card for another one to increase the rewards you earn.
Consider a Cash Back Credit Card
If you don’t plan to travel, you might want to consider a cash back credit card, like the Citi® Double Cash Card. This kind of credit card allows you to get rewards now rather than waiting an indefinite amount of time for when you want to travel. In general, getting a cash back card gives you a better value than racking up travel points or miles and then trying to redeem them for merchandise or cash.
For example, if you regularly spend at restaurants with the Citi Double Cash Card, you’ll earn 2% cash back: 1% on all eligible purchases and an additional 1% after you pay your credit card bill.
While 2% cash back isn’t a bad rewards rate, you can find better value in a card like the American Express® Gold Card, which gives 4X the Membership Rewards® points per dollar spent in restaurants and groceries.
Don’t Waste Spending Credits
It’s a good idea to choose a card that allows you to keep your options open. In recent years, banks have added spending credits to many of their credit cards. During the early months of the pandemic, issuers like Chase and American Express were offering rewards for more essential purchases, like groceries and takeout, since travel credit cardholders weren’t able to use their advantages.
Premium cards, including the Business Platinum Card® and the Platinum Card® from American Express, award several credits to cardholders, including Uber credits, airline fee credits, and more. However, because these cards have high annual fees, it’s important to use the credits to recoup some of the annual fees.
Choose a Card With Travel Insurance
The travel insurance industry has seen a surge in the number of customers, as more Americans have become cautious about travel and health issues.
Did you know that your travel credit card may have free travel insurance as a benefit? By booking your flight on the right card, your trip can be automatically covered if you experienced a long delay or a trip cancellation.
Is a Gas Credit Card Worth It?
With gas prices reaching record highs, is it worth getting a gas credit card to save money?
It certainly sounds tempting. Gas credit cards, such as those offered by Shell or ExxonMobil, typically offer a discount of up to 10 cents per gallon of gasoline. So filling a 15 gallon tank, at an average cost of $62.55, could reduce the total by up to $1.50.
But regular cash back credit cards could save you even more.
Consider a rewards credit card that pays out 5% cash back on gas purchases in order to get the most generous gas discounts. A rewards card that pays you 5% on your gas purchases could mean a savings of $3.13, more than double the gas card.
That’s not all. Since gas credit cards pay rewards in cents rather than as a percentage of the total, you actually get less when gas prices rise.
You can also find options with no annual fee. Just make sure you understand the discount limits and research and compare extensively.
For instance, the Citi Custom Charge Card offers cardholders 5% cash back on their highest spending category each billing cycle (which can include gas), and can be up to $500 in purchases per cycle. Other purchases earn 1% cash back.
For those who find it worth buying a warehouse club membership, Sam’s Club and Costco offer credit cards that generously reimburse gas purchases, which can be made at any gas station.
If you drive a lot and expect to hit a rewards cap, consider using this card just for gas purchases, while switching to a different one for different spending categories.
Another option that might interest you is the PenFed Platinum Rewards Visa Signature Card. This card pays five times the points on gas purchases and electric vehicle charging stations, with no mileage cap. These points can be used for travel, merchandise, and gift cards, among other categories. The card is available through the PenFed Credit Union, which is open to new members with a $5 deposit.
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