By: Julia Bellotti
Do you have a credit card? Do you use it? Do you pay it off every month? If so, you may have some hidden rewards in your account that you may not be tracking. The Adult Dish is here to help you figure out if you may have some hidden benefits or rewards, as well as how to use your rewards once you have them.
*Author’s note: There are also many rewards available to business credit card holders, but this article will only cover personal credit cards.
How to Know if Your Credit Card Has Perks
First, look at your credit card. Is there a bank name? Card issuer? A fancy word like “Sapphire,” “Venture,” “it,” or even “Visa”? If so, you likely have rewards available to you. For instance, many people may not realize that their ordinary Visa card has perks like rental car insurance, lost luggage reimbursement, extended warranties on purchased items, access to golf courses, and premium events.
A quick list of some of the most common credit card benefits is below. Keep in mind your card may qualify for multiple of these, such as the Capital One Venture card which is also a Visa Signature card. This list is not exhaustive, so if your card isn’t listed here, a simple online search with the name and “benefits” will provide an answer. I have purposefully not included airline or hotel branded credit cards, as the holders of those cards likely signed up specifically for the benefits.
Once you’ve found your credit card rewards, you’ll need to login to your account and see how many points or rewards you have. You will earn points, cash back, and other rewards at different rates depending on which credit card you have. If you have two credit cards that you use about equally, don’t be surprised if one has significantly more points than the other.
Some of your benefits may not earn you points nor cash back, and that’s ok! You’ll want to keep those in mind as you’re spending in your daily life. Cards can offer price protection, concierge services, airport lounge access, hotel burglary insurance, and more. Those protections can save you significant amounts of money if you use that card to purchase merchandise or travel.
How to Spend Points
Login to your credit card account and find your rewards portal. You’ll likely be looking for a button that says “Redeem.” Once you’ve found it, you may see several options. You could get statement credit, usually at a 1 point = 1 cent rate, you could potentially redeem for travel, or you can get access to special experiences. The type of credit card you have will determine your travel and experience redemption rate. While Capital One offers a 1 point = 1 cent redemption rate on travel, other companies like Chase may offer 1 point = 1.25 or 1.5 cents. Second, refresh your basic math skills; you’ll want to make sure you’re making the best decision when spending your rewards. Do you have 25,000 points? That’s equal to $250 statement credit/cash back.
Very easily, you can see how an entire vacation could be paid for using points. Did your plane ticket and hotel cost $750? If you had used 75,000 points, you could’ve spend $0 out of pocket for those expenses. Personally, I tend to use my points when plane tickets are really expensive (such as around the holidays), or I just need a little extra room in my budget.
Your credit card may also offer experiences you can redeem your points for. This could include golf tournaments, chef tables at certain restaurants, awards shows, sports games, and more. In those situations, you’ll need to provide the name(s) of the person using it, and you’ll be sent the tickets/reservation after you redeem your points for it.
Spending Points: Advanced Level
The real value in points redemption is when you can transfer to specific airline or hotel partners. Airline loyalty programs do not use the 1 point = 1 cent rule; they primarily do it based on the distance of the flight. American Airlines, for example, charges 7,500 points for a MileSAAver (standard economy) ticket that’s under 500 miles in the contiguous 48 U.S. states and Canada. That is true whether that flight costs $50 or $200. You can easily see how your points could suddenly be worth 2, 3, or 6 cents depending on how you redeem them.
To complicate matters further, if you know that American Airlines and British Airways are partners, you could book a 1,000-mile-long American Airlines flight through British Airways for only 7,500 points whereas booking it directly through American would cost 12,500 points.
There is a whole world dedicated to getting the most from your points, and this is why those basic math skills are important! If you’re curious on maximizing your redemptions, check out www.ThePointsGuy.com run by Brian Kelly and his team.
Now, the Number 1 rule of credit card points and rewards is to never carry a balance. The moment you start paying interest is the moment your benefits are negated. Although spending $2,000 on plane tickets with your Chase Sapphire Reserve card will net you 6,000 points which are worth $90 when you redeem through Chase’s portal, the interest you’d pay on that $2,000 (if you only made the minimal payment) is astronomically more than your $90 reward.
Overspending is easy to do with credit card sign-up bonuses. For example, a card may offer 50,000 points if you spend $3,000 over three months. A common solution? Pay for other people’s expenses ONLY if you are 100% confident they will pay you back. Pay for the entire tab on a group dinner and have everyone Venmo you. Pay for your family’s vacation AirBnB and plane tickets. Is a friend furnishing a house? Pay for their new couch and have them pay you back. This is an easy way to get assistance spending the minimum amount required for a large sign-up bonus IF you know you will be paid back by your friends and/or family.
This quick article here is really just the tip of the iceberg. If credit card rewards sound appealing and you want to learn more, I recommend checking out the following: