When it comes to maximizing credit card rewards, many people choose to never pay an annual fee. That way, they never have to worry about canceling the card if they stop using it enough, or the impact on their credit if they do.
Two excellent rewards cards that can help you maximize rewards without ever paying an annual fee are the Discover it® Cash Back and Chase Freedom® cards. Although they’re issued by different banks, neither one charges an annual fee, and they both offer a lucrative rewards program that allows you to rack up cash back on purchases. Here’s how they work:
Discover it® Cash Back
Rotating 5% Cash-Back Categories:
- January – March 2018: Gas Stations, Internet/Cable/Phone Services
- April – June 2018: Coming Soon
- July – September 2018: Coming Soon
- October – December 2018: Coming Soon
Here are some other tips and things to watch out for to make you’re the one taking advantage of your credit cards (and not the other way around):
Always pay your bill in full.
Although both cards offer 0% intro APR on purchases for a limited time, you should practice paying your balance in full each month. You won’t benefit from the rewards if you wind up paying interest on your purchases.
Don’t forget to opt in.
With the Chase Freedom® card and the Discover it® Cash Back, you need to “opt in” each quarter to earn the full 5% cash back on qualifying purchases. It’s easy to do online, but some might see it as an additional hassle.
Compare other perks.
If you’re trying to decide between the Chase Freedom® and Discover it® cards, don’t forget to look at the other perks each offers. The Chase Freedom®, for example, offers a sign-up bonus after you meet a minimum spending requirement in the first three months. Meanwhile, the Discover it® Cash Back offers a free FICO score on your monthly statement and online.
Know your redemption options.
With the Discover it® card, you can redeem your rewards in a few ways – as a direct deposit into your bank account, a statement credit, a payment through one of Discover’s partners (such as iTunes, Facebook, or Amazon.com), or a gift card to any number of retailers.
With the Chase Freedom® card and the Discover it® Cash Back, you have even more options. Not only can you redeem for cash back, but you can also redeem your points for gift cards or travel gift cards. And if you also have a Chase card that earns Ultimate Rewards points, such as the Chase Sapphire Preferred® Card, you can even combine your points and transfer them to a number of hotel loyalty and frequent flyer programs, such as British Airways, IHG, Marriott, Hyatt, Virgin Atlantic, and Southwest Airlines.
The key to maximizing these rewards is to look for subtle and not-so-subtle ways to save on purchases you were going to make anyway. And once you do, you get to enjoy the fun part – looking for ways to spend all of the rewards you’ve earned.
Do you try to maximize your rewards categories? What strategies do you use?
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