ST. CROIX INSIGHTS

How to Make the Most of Your Credit Card Rewards

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC
woman on vacation paying with a credit card

Each year, I get four free Marriott nights with my credit cards, and I feel great about my credit card reward points — a common response I hear today and one I’ve even said myself.

It all started about a year and a half ago. I was being productive on Facebook, minding my own business, and stumbled upon some reels about credit cards and “transferable currency.” Intrigued, I started watching these reels intermittently for a few months. I knew there was something valuable there, but I wasn’t ready to delve into it. So, I mentioned it to Mrs. Anderson, suggesting she investigate it. Smart leaders delegate, right?

After a month or two, she started watching the reels and realized we could significantly improve our credit card rewards strategy. We shifted our mindset to view our rewards as transferable currency, enabling us to enjoy substantially reduced travel expenses with our current spending level — making our regular Marriott four-night stays look like child’s play. Less than 1% of people take the time to truly understand how their spending and credit card reward programs work.

To Dave Ramsey’s followers: yes, this strategy only works if you pay off your credit cards each month, which we do. We live within our means and integrate our normal spending with credit cards to maximize rewards. If you can’t stick to a monthly spending budget with cash or a debit card, you won’t be able to with a credit card, regardless of what research says.

There is an entire sublanguage and learning curve around credit card reward programs. With prices for everything skyrocketing, why not dive deep and figure out how to maximize credit card rewards to reduce travel expenses?

For business owners, the concept of transferable currency becomes even more valuable due to your increased monthly spending and the ability to obtain a host of credit cards not available to non-business owners.

How’s it going for us? This past April, we attended a two-day credit card convention in Milwaukee, Wisconsin. I can’t believe I attended such an event, but I did. It’s truly a subculture with its own language. There are so many learning opportunities, and it’s not just about what’s in your wallet. I had no idea there are strategies around which credit cards to have—some are actually better and even preferred.

And it can’t be stressed enough: this strategy only works if you pay off your cards each month.

Travel is a big priority for us. Any way to extend our travel budget and get upgrades for flights and hotels, I’m going to figure it out. It didn’t take long to rack up a million transferable currency points and put them to good use!

I have no financial affiliation with any of the following Facebook groups: Travel on Points, Award Travel 101, and The Points Guy. I follow these groups for ideas and advice.

We follow a budget for savings, spending, and giving. It’s not surprising when I approach this subject and see the deer-in-the-headlights look. Yet, I’m hooked. I see the value, and I believe you can too.

Key Credit Card Terms You Should Know

To better navigate the world of credit card rewards, it’s essential to understand some key terms:

  • Purchase Annual Percentage Rate (APR): The annualized interest rate that you are charged for borrowing money through your credit card.
    • Purchase APR: The interest rate applied to purchases made with the card.
    • Balance Transfer APR: The interest rate applied to balances transferred from another card.
    • Cash Advance APR: The interest rate applied to cash advances taken out using the card.
    • Penalty APR: A higher interest rate that may be applied if you miss payments or violate other terms of your credit card agreement.
    • Introductory APR: A lower interest rate offered for a limited time as an incentive for new cardholders.
  • Credit Limit: The maximum amount of credit that a financial institution extends to a client.
  • Balance Transfer: Moving debt from one credit card to another, usually to take advantage of a lower interest rate.
  • Cash Advance: A service provided by credit card issuers allowing cardholders to withdraw a certain amount of cash, often at a higher interest rate.
  • Minimum Payment: The smallest amount you can pay by the due date to keep your account in good standing. Paying only the minimum payment means your balance accrues interest.
  • Rewards Program: A program offered by credit card issuers where cardholders earn points, miles, or cashback on purchases.
  • Transferable Currency: Rewards points or miles that can be transferred between different loyalty programs or redeemed in various ways.
  • Statement Credit: A credit applied to your account balance, often used as a way to redeem rewards.
  • Foreign Transaction Fee: A fee charged for purchases made outside of your home country, typically a percentage of the transaction amount.
  • Credit Utilization Ratio: The ratio of your credit card balances to your credit limits, which is a key factor in your credit score.
  • Interest-Free Period: The time between the purchase date and when interest begins to be charged, provided the balance is paid in full by the due date.
  • Late Payment Fee: A fee charged when a payment is not received by the due date.
  • Grace Period: The period during which you can pay your credit card balance without incurring interest charges.
  • Variable Interest Rate: An interest rate that can change based on an underlying index or benchmark.
  • Fixed Interest Rate: An interest rate that remains constant throughout the term of the credit card agreement.

Understanding these terms will help you make informed decisions and maximize the benefits of your credit card rewards program.

 

Each year, I get four free Marriott nights with my credit cards, and I feel great about my credit card reward points — a common response I hear today and one I’ve even said myself.

It all started about a year and a half ago. I was being productive on Facebook, minding my own business, and stumbled upon some reels about credit cards and “transferable currency.” Intrigued, I started watching these reels intermittently for a few months. I knew there was something valuable there, but I wasn’t ready to delve into it. So, I mentioned it to Mrs. Anderson, suggesting she investigate it. Smart leaders delegate, right?

After a month or two, she started watching the reels and realized we could significantly improve our credit card rewards strategy. We shifted our mindset to view our rewards as transferable currency, enabling us to enjoy substantially reduced travel expenses with our current spending level — making our regular Marriott four-night stays look like child’s play. Less than 1% of people take the time to truly understand how their spending and credit card reward programs work.

To Dave Ramsey’s followers: yes, this strategy only works if you pay off your credit cards each month, which we do. We live within our means and integrate our normal spending with credit cards to maximize rewards. If you can’t stick to a monthly spending budget with cash or a debit card, you won’t be able to with a credit card, regardless of what research says.

There is an entire sublanguage and learning curve around credit card reward programs. With prices for everything skyrocketing, why not dive deep and figure out how to maximize credit card rewards to reduce travel expenses?

For business owners, the concept of transferable currency becomes even more valuable due to your increased monthly spending and the ability to obtain a host of credit cards not available to non-business owners.

How’s it going for us? This past April, we attended a two-day credit card convention in Milwaukee, Wisconsin. I can’t believe I attended such an event, but I did. It’s truly a subculture with its own language. There are so many learning opportunities, and it’s not just about what’s in your wallet. I had no idea there are strategies around which credit cards to have—some are actually better and even preferred.

And it can’t be stressed enough: this strategy only works if you pay off your cards each month.

Travel is a big priority for us. Any way to extend our travel budget and get upgrades for flights and hotels, I’m going to figure it out. It didn’t take long to rack up a million transferable currency points and put them to good use!

I have no financial affiliation with any of the following Facebook groups: Travel on Points, Award Travel 101, and The Points Guy. I follow these groups for ideas and advice.

We follow a budget for savings, spending, and giving. It’s not surprising when I approach this subject and see the deer-in-the-headlights look. Yet, I’m hooked. I see the value, and I believe you can too.

Key Credit Card Terms You Should Know

To better navigate the world of credit card rewards, it’s essential to understand some key terms:

  • Purchase Annual Percentage Rate (APR): The annualized interest rate that you are charged for borrowing money through your credit card.
    • Purchase APR: The interest rate applied to purchases made with the card.
    • Balance Transfer APR: The interest rate applied to balances transferred from another card.
    • Cash Advance APR: The interest rate applied to cash advances taken out using the card.
    • Penalty APR: A higher interest rate that may be applied if you miss payments or violate other terms of your credit card agreement.
    • Introductory APR: A lower interest rate offered for a limited time as an incentive for new cardholders.
  • Credit Limit: The maximum amount of credit that a financial institution extends to a client.
  • Balance Transfer: Moving debt from one credit card to another, usually to take advantage of a lower interest rate.
  • Cash Advance: A service provided by credit card issuers allowing cardholders to withdraw a certain amount of cash, often at a higher interest rate.
  • Minimum Payment: The smallest amount you can pay by the due date to keep your account in good standing. Paying only the minimum payment means your balance accrues interest.
  • Rewards Program: A program offered by credit card issuers where cardholders earn points, miles, or cashback on purchases.
  • Transferable Currency: Rewards points or miles that can be transferred between different loyalty programs or redeemed in various ways.
  • Statement Credit: A credit applied to your account balance, often used as a way to redeem rewards.
  • Foreign Transaction Fee: A fee charged for purchases made outside of your home country, typically a percentage of the transaction amount.
  • Credit Utilization Ratio: The ratio of your credit card balances to your credit limits, which is a key factor in your credit score.
  • Interest-Free Period: The time between the purchase date and when interest begins to be charged, provided the balance is paid in full by the due date.
  • Late Payment Fee: A fee charged when a payment is not received by the due date.
  • Grace Period: The period during which you can pay your credit card balance without incurring interest charges.
  • Variable Interest Rate: An interest rate that can change based on an underlying index or benchmark.
  • Fixed Interest Rate: An interest rate that remains constant throughout the term of the credit card agreement.

Understanding these terms will help you make informed decisions and maximize the benefits of your credit card rewards program.