Maximize your credit card rewards: How playing the field can pay off
Key takeaways
- Brand loyalty to certain credit cards or issuers can limit your rewards earning potential.
- Use multiple cards to maximize rewards rates, which might involve switching cards or using different cards for different types of spending.
- Understand the redemption options for each of your cards to get the most value from your rewards.
Credit card rewards programs are tempting. They offer cash back, travel miles or points on your purchases, meaning you get a little something back for your regular spending. But does it make sense to remain loyal to one credit card to maximize those benefits, or is it better to play the field, switching between cards to take advantage of the strongest rewards? As it turns out, the secret to optimizing credit card rewards might just be brand disloyalty.
What are credit card rewards and how do they work?
Credit card rewards are a type of loyalty program that allows you to earn points, cash back, miles and other rewards when you make eligible purchases with your credit card. For example, if you have a 2 percent cash back card, you’d get 2 cents back for every dollar you spend.
When it comes to cards that earn points and miles, these types of rewards can be worth anywhere from 1 cent each to about 3 cents or more, depending on the brand and how you redeem your rewards.
Credit card companies use these rewards programs as an incentive to encourage cardholders to use their cards, which in turn boosts the issuers’ revenues from interchange — or swipe — fees. A compelling rewards program can also help card issuers attract customers in new market segments and set them apart from competitors. Offering rewards that align closely with customer spending habits can increase card usage and bolster customer loyalty.
Yet, while your loyalty may be good for your issuer, it doesn’t always get you the best deal as a consumer.
Why you shouldn’t be loyal to a single rewards program
Sticking to one credit card’s rewards program sounds convenient, but it can limit your earning potential. No single card offers all the benefits you might be looking for, and you could be missing out on other rewarding opportunities.
Being disloyal frees you up to make decisions in the moment
Let’s consider the credit card options for two people — Sally and Bob — who both spend about $2,000 a month on everyday purchases.
Sally strategically uses two cards: the Chase Freedom Unlimited® and the American Express® Gold Card. Her Freedom Unlimited card, which has no annual fee, earns her:
- 5 percent back on travel through the Chase Travel℠ portal
- 5 percent back on Lyft rides (through March 2025)
- 3 percent back on dining and drugstore purchases
- 1.5 percent cash back on other purchases
Her Amex Gold Card, which has a $325 annual fee, earns her:
- 4X points on U.S. supermarket purchases (up to $25,000 spent annually)
- 4X points at restaurants (including takeout and delivery in the U.S.)
- 3X points on flights booked directly with airlines or through Amex Travel
- 2X points on prepaid hotels through Amex Travel
- 1X points on all other purchases
Bob, on the other hand, carries only the Citi Double Cash Card®, which has no annual fee and earns him 2 percent cash back on all his purchases — 1 percent when he makes his purchase and another 1 percent when he pays his balance.
Even though the Freedom Unlimited is called a “cash back card,” rewards accumulate as Chase Ultimate Rewards — whereas the Amex Gold offers rewards in the form of Membership Rewards. Both can be redeemed for cash back, though travel redemptions typically offer more value.
| Spending category and amount | Sally’s earnings | Bob’s earnings |
|---|---|---|
| Groceries – $400 | 1,600 Membership Rewards points | $8 |
| Dining out – $350 | 1,400 Membership Reward points | $7 |
| Streaming services – $150 | 225 Ultimate Rewards points | $3 |
| Gas – $200 | 300 Ultimate Rewards points | $4 |
| Utilities – $400 | 600 Ultimate Rewards points | $8 |
| Incidentals – $250 | 375 Ultimate Rewards points | $5 |
| Flights – $250 | 1,250 Ultimate Rewards points (booked through Chase Travel℠ portal) | $5 |
| Total spend = $2,000 | Total earned = 5,750 points | Total earned = $40 |
Bob’s $40 in rewards for the month isn’t bad, but compare that to the 5,750 points Sally racked up on her spending. The value of Membership Rewards points changes depending on how they’re redeemed. For example, if Sally were to use her points to book flights via the Amex Travel portal, each point would be worth 1 cent apiece. If her Ultimate Rewards were also worth 1 cent apiece, this would mean that Sally’s rewards are worth $57.50 total. Using this example, Sally would earn $210 more in rewards than Bob over the course of a year — which is a pretty significant difference.
By not committing to a single credit card brand, Sally allowed herself the freedom to take advantage of the best rewards credit card for each of her purchases. This flexibility can lead to more earning opportunities and the ability to tailor your card use to your current spending habits. Just don’t forget to take annual fees into account — you want to make sure whatever cards you’re carrying provide enough value, whether through rewards or card benefits, to outweigh those fees.
Loyalty programs change over time
Even if you’ve adopted a multicard strategy to maximize your rewards, you could find yourself the victim of the issuer’s changing plans. Loyalty programs evolve, and what was once a great program may no longer be as attractive as time wears on.
At the height of the COVID-19 pandemic, for instance, many issuers tweaked their rewards programs to meet the needs of customers sheltering at home, stepping up rewards for supermarket purchases and food delivery. These changes met the needs of changing consumer spending habits at the time. Not all issuers made these rewards rates permanent, however, walking them back to pre-pandemic rewards rates once the pandemic concluded.
Similarly, co-branded airline cards are subject to frequent changes to rewards rates, welcome offers and more.
Simply put, if the card isn’t working for you anymore, it’s time to move on. By remaining open to switching cards, you’re more likely to stay on top of the best rewards programs and continue maximizing your earnings.
Your spending habits also change over time
It’s not just the issuers’ changes that can affect a card’s usefulness for you. As your spending habits or lifestyle change, so should your credit card strategy.
Maybe that cash back credit card was great when you were starting out, but now you’re settled and looking to take advantage of a top travel rewards card. Or maybe the jetset lifestyle and travel rewards worked for you before having kids, but now you’re staying home a bit more and looking for cash back on everyday purchases.
Rewards cards offer different rewards rates, and certain cards may better fit your evolving spending habits. The key is being flexible and willing to adapt to a different brand, if that’s what is best for you.
How to maximize a credit card rewards strategy
Maximizing credit card rewards is about more than just spending — it’s about strategic spending. This involves selecting the right card for your spending habits, using multiple cards to take advantage of different rewards rates and understanding the redemption options for your rewards.
Focus on future you
When comparing credit cards, think about your future spending habits. If you plan to travel more, you might want to switch to a card that offers stronger travel-focused rewards and perks, like airport lounge access or elite status. By focusing on your future needs, you can ensure that your credit card rewards continue to provide value.
No one can plan for everything, but it’s worth taking the time to consider your short, medium and long-term goals before applying for a new card.
Adapt your card use as spending habits change
Successfully using your credit cards — whether they offer rewards or not — begins with a solid budget. It just so happens that your budget can also help you maximize your rewards. Ideally, you want to align your credit card use with your spending habits.
If you find yourself dining out more often, consider using a card that offers top rewards on restaurant spending. When your spending shifts toward online shopping, switch to a card that provides boosted rewards for digital spending.
By adjusting your credit card use to match your spending habits, you can maximize your rewards earnings.
Consider each payment — and choose your card wisely
When opening your wallet, don’t just grab the Chase card because you always go for Chase. Instead, choose a rewards card that will earn you the most on a given purchase, even if it’s not the one you typically reach for.
Label the cards you carry by popular spending categories so that you don’t have to remember everything — instead, the right card choice will be front and center when you need it.
Study your card’s rewards redemption options
Understanding your card’s rewards program is crucial to maximizing the value of your points, miles and cash back. Not only do some cards offer higher value for certain redemption options, but some cards offer options that others don’t.
For instance, if you’ve exclusively collected Membership Rewards points but the flight you really want happens to be with Southwest, you’re out of luck in terms of getting a top rewards redemption. Yet if you also have Ultimate Rewards points to redeem, you might be able to transfer them to Southwest for stronger value.
The bottom line
Brand disloyalty can work in your favor when it comes to credit card rewards. Whether it’s strategically choosing from multiple cards to earn top rewards or building different banks of rewards points for stronger options when it comes redemption time, the key is keeping your options open.
Understanding your lifestyle, goals and expenses — and then using your cards responsibly — is the foundation of any solid credit card rewards strategy.
