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How to manage my credit card rewards

Should you spend or save your rewards?

Updated

Managing your credit card rewards may seem complicated, especially if you have multiple credit cards. Still, it’s an exciting issue to tackle because it means you potentially have a lot of rewards to gain. Here are some ways to simplify your rewards management.

Should you save up rewards?

If you can earn enough points to redeem for a reward while keeping your credit card active, there’s no doubt you should save up your rewards.

But if you have a credit card you rarely use — say only for traveling abroad — saving up for rewards may be a poor choice. That’s because if unused, your card issuer may close your account for inactivity and you will lose all your points.

How to manage my rewards

If you find yourself hoarding credit card rewards, here’s how to manage them better:

  • Don’t miss out on deals. If you happen to find a deal you like, use your points. Waiting on better deals can result in hoarding even more rewards that may eventually expire.
  • Save up your rewards. As mentioned before, saving up your rewards for that one trip to Europe or Hawaii can be worth it if you can manage to earn enough before your rewards expire.
  • Invest your rewards. Cashback credit cards are ideal to get new investment cash. Instead of spending your cash rewards, consider investing it in a savings account.
  • Opt-in for automatic redemption. Some card providers allow you to automatically redeem your rewards as soon as you reach a certain threshold. This can keep your mind off your rewards.

Compare rewards credit cards

If you already own a rewards credit card, you may want to consider pairing it with another to get the most of your spending. For example, if you now earn flat rewards on all purchases, you can get a credit card with accelerated rewards on gas or dining. Another example of an optimal combination of cards is the Chase trifecta, which is pairing three Chase cards that each serve distinct purposes.

Name Product Welcome offer Rewards Annual fee Filter values
Chase Freedom Flex℠
$200 after spending $500 in the first 3 months, plus 5% cash back at grocery stores on up to $12,000 in the first year
5% back in rotating categories up to $1,500 combined each activated quarter (then 1%), 5% on travel purchased through Chase, 3% on dining and drugstores, and 1% on all other purchases
$0
Get up to 5% cashback in rotating and newly added everyday categories. The refreshed Freedom Flex card has lots of earning potential.
Blue Cash Everyday® Card from American Express
$150 after spending $1,000 in the first 3 months
2% at US gas stations and select US department stores, 3% at US supermarkets on up to $6,000 per year, then 1% after that and on all other purchases
$0
Get 3% cash back on groceries on up to $6,000 annually (then 1%) with no annual fee. This is a simple and effective rewards card. Rates & fees
Blue Cash Preferred® Card from American Express
$250 after spending $1,000 in the first 3 months
6% on select US streaming services, 3% on transit and US gas stations, 6% at US supermarkets on up to $6,000 annually, then 1% after that and on all other purchases
$95
Perfect for families: Get up to 6% on everyday purchases and a welcome offer worth $250. This heavy-hitter rewards card has uncontested value. Rates & fees
Chase Sapphire Preferred® Card
80,000 points after spending $4,000 in the first 3 months, a value of up to $1,000 through Chase Ultimate Rewards
5x points on Lyft, 2x points on travel and dining and 1x points on all other purchases
$95
Earn a huge signup bonus worth $$1,000 with this popular travel card. Combine with other Chase Ultimate Rewards cards for even greater value.
Citi® Double Cash Card
N/A
Up to 2% cash back on purchases (1% when you buy plus 1% as you pay)
$0
Earn up to 2% on every purchase with no annual fee. This is the highest flat-rate cashback card on the market.
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Bottom line

Managing your rewards may feel like a hassle, but there are some strategies, such as automatic redemption when you reach a certain amount, investing your rewards in a savings account or using your rewards as soon as you spot a deal. Other events like the coronavirus pandemic can also throw a wrench in your redemption plans, so plan out how you’ll use your rewards in an emergency as well.

If you already own a rewards credit card, you may want to consider applying for a second card to complement your first.

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