The best rewards credit cards let you earn free airfare, free hotel stays, exclusive discounts, and cash back for your everyday spending. And as credit card rewards get more lucrative, they’re attracting more attention.
Of the 368 million open credit card accounts in the U.S., according to a 2019 report from the American Banking Association, consumers are more aware than ever before of the upside to having the right rewards card in their wallet.
In addition to rewards for ongoing spending, generous signup bonuses are upping the ante and making credit card rewards even more attractive.
With all these perks, our world will never be the same. Here are 9 ways credit card rewards have reshaped life as we know it.
You get an open door to free travel.
In the early days of credit card rewards, getting cash back was all the rage. However, travel rewards credit cards have quickly gained traction since they tend to offer some of the best redemption value. They also have amazing signup bonuses that open the door to free travel faster than you might think.
If you look at the Chase Sapphire Preferred® Card as an example, you’ll see you can earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®.
Once you rack up rewards, you have the choice to redeem for a weekend trip to visit your aunt in Florida, save them to cover airfare to Belize, or transfer them to airline or hotel partners to get even more bang for your travel buck.
Applying for a new card isn’t a big deal.
Your parents may have stuck to using one or two credit cards throughout their lives, but credit card rewards have led consumers to apply for and carry multiple cards in their wallets. With new rewards opportunities around every corner, having as many as 26 rewards cards or more isn’t unusual.
Although, having a credit score that falls in the “good” or “very good” range is a prerequisite to qualifying for many of the credit cards that offer rewards. Further, racking up purchases without paying the balance off each month can be detrimental.
While getting a new card every few months isn’t a big deal when you have specific goals for your rewards points, make sure you’re able to pay the bill in full before you decide to pay with plastic.
You don’t mind adding an authorized user.
Credit card companies can offer bonus points for adding authorized users to your account, which is a pretty sweet deal. But after the thrill of “free” points wears off, having an authorized user on your account is still worthwhile.
Since spending by any cardholder earns you points, you won’t mind adding an authorized user (or two) to your account. If your signup bonus has a minimum spending threshold to qualify, their spending can combine with yours to help you get there more quickly.
Plus, you have the potential to boost the credit rating of the person you add to your account. Even though that doesn’t directly benefit you, adding someone to your account might increase their credit enough to qualify for their own rewards credit card. And helping someone build credit can make you feel warm and fuzzy inside.
More people are opting out of using cash.
Credit cards have an advantage you don’t get when paying with cash — the potential to earn rewards points. If given the option between earning rewards towards cash back and free travel or getting nothing at all, most people would gravitate toward earning rewards.
Even die-hard fans of using cash are converting to using a credit card to get the benefit of rewards points.
And it makes sense since paying with plastic is more convenient than carrying around cash, too.
You make plans based on points value.
Whether you’re earning travel points or cash rewards, credit card rewards can have a significant influence over the choices you make. If you’re cashing in your rewards for a hotel, for instance, getting a points discount on one hotel chain over another could be enough to sway your decision.
Luckily, credit cards like the Chase Sapphire Preferred® Card can make your decision easier since they offer loyalty programs with a full 1:1 transfer of points to partner hotels and airlines.
That way, if your original plan was to drive out to your cousin’s wedding in San Diego but now you need to fly because you couldn’t get the time off work, your points are still worth something. Redeeming your rewards with your card issuer or transferring them to United or Southwest can get you in the air in no time.
You now use points to pay for purchases.
Credit cards have long been used to pay for purchases online, but several credit cards have taken it to a new level. If you have a card from Amex, Chase, Citi, Discover or Hilton, you might have access to the Shop with Points program at Amazon.
Rather than limiting your redemption options to a credit card shopping portal, the entire platform and every product on Amazon.com are open to you.
After you gather your goods in your virtual shopping cart and click over to start the checkout process, one of your payment options is to Shop with Points. Amazon calculates the value of your rewards points according to which credit card you link to your account, making buying your favorite things without paying out of pocket possible.
You’re more likely to shop online.
Not only does Amazon’s Shop with Points program make shopping online easier, but your credit card issuer probably has an online bonus mall to buy from, too.
The main perk of shopping the credit card bonus mall is the bonus rewards points or cash back you earn when you click through to make a purchase. Two of the most popular online bonus malls come from Chase Ultimate Rewards® and the Citi Bonus Cash Center.
If you’re not sure whether your card offers one, logging into your account or searching for the name of your card issuer and bonus mall - for instance, “Chase bonus mall” - can help you find out.
And when you’re earning additional bonus points for something you’d buy anyway, why not take advantage of it?
Carrying around multiple credit cards has become the norm.
Most credit card users have a favorite credit card. But even the most loyal cardholders will abandon their card of choice for the chance to cash in on extra rewards points.
Because not every card is created equal, this often means you’ll carry around multiple credit cards and rotate them in and out of your wallet to maximize your rewards.
Having a revolving set of credit cards is common, and it’s often necessary since some card issuers highlight different spending groups throughout the year.
Discover Card, for example, is known to let you earn a 5% cashback bonus on different categories. In 2019, Discover’s cashback bonus went from groceries to gas stations to restaurants to Amazon.com.
You aren’t afraid to compare your points balance with others.
Finances were once a taboo subject. No one - not your parents, your sister, or even your spouse - talked about money. But personal finance is less controversial these days, and credit card rewards are a hot topic.
Everyone wants to know the best new credit card rewards strategies, and cardholders aren’t shy about sharing their rewards balance and how they earned them.
And if your friend wants to apply for the card you’ve been racking up rewards with after you tell her about it, you could both get a referral bonus. So, why wouldn’t you talk about it?