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Bottom Line Up Front

  • Rewards credit cards offer you perks such as cash back or airline miles for your spending on the card, which can be a nice bonus for your personal finances.
  • It can be easy to make mistakes with rewards cards, though, such as picking a card that doesn’t work well for you and missing opportunities to earn bonus rewards.
  • You also need to keep your card in good standing with a strong payment history to maximize rewards.

Time to Read

3 minutes

May 18, 2022

Credit cards with rewards have continued to grow in popularity since their origins in 1989, when the first airline rewards cards were introduced. Nowadays, credit card issuers may reward you for every type of purchase, with your choice of airline miles, gas discounts, physical goodies or cold, hard cash. This fact makes the best credit cards and their perks lucrative for the personal finances of virtually everyone. There are some common credit card mistakes to watch for on your journey to making those flights or gift cards a reality. Here are some common missteps and how to avoid them.

1. Choosing the Wrong Program for You

Cash-back rewards are a great option for many, but if you’re a globetrotting adventurer, then you may get more value out of your credit card by applying for travel rewards. Combine those rewards with an airline’s loyalty program for even more bang for your buck.

2. Paying With Cash Instead of Your Card

If you’re used to paying with cash for smaller purchases, you may be missing out on earning rewards points. Every little bit can help you reach your goal. And, if you avoid late payments and keep your credit utilization rate low, the small charges won’t hurt your credit score.

3. Failing to Take Advantage of Sign-Up and New Cardholder Bonuses

A new credit card might come with perks such as an introductory interest rate, bonus points or a cash bonus for spending a certain amount within a short period. Be sure to check the fine print so you don’t miss out on any of these new cardholder bonuses by just a few dollars.

4. Neglecting Rotating Rewards

Lines of credit with rotating rewards will offer incentives (such as bonus points) for spending in set categories (such as travel) during certain billing cycles. To take advantage of these bonuses, you may want to shift the timing of certain purchases.

5. Making Purchases Just for the Rewards

Think carefully—are you buying an item and taking on new credit card debt only because of the rewards? By not making the purchase at all, you could invest that money instead of earning just a fraction of it back.

6. Not Shopping in the Card’s Member Portal

Some credit card companies offer online shops that let you buy from many of your favorite retailers, all while earning extra points or getting exclusive discounts. At Navy Federal, credit cardholders can shop online through Member Deals for special perks.

7. Using the Wrong Card for Your Needs

If you're planning to make a larger purchase and pay it off over time, you might want to use a lower-rate card without rewards to minimize the interest charges. Otherwise, the high interest rates you pay may negate the value of any rewards you earn.

8. Neglecting the Credit Card Terms

Many rewards programs require you to keep your credit card account in good standing. That means always making at least the minimum payment by the due date and not missing payments. Take note of any annual fee—if you don’t use the card enough to earn more than that fee amount in rewards, it’s not worth it.

Rewards cards can pay off in big ways, but you’ll want to know all the ins and outs of your card to ensure that you’re maximizing your benefits.

Key Takeaways Key Takeaways


This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.