rewards credit cardCredit card rewards not only allow cardholders to enjoy fun perks, but they also can serve to supplement your purchases, assuming you have a plan in place to properly take advantage of them. Many people are aware of the benefits that credit cards provide, but credit cards can help you achieve financial flexibility and even help you save if you know how to make your credit card work for you. Keep reading as we provide examples of smart strategies that will allow you to get the most out of your rewards credit card.

Pitfalls preventing you from taking advantage of your credit card’s benefits

When it comes to maximizing credit card benefits, it’s essential to grasp common pitfalls that can turn a credit card into a burden. Here are a few of the pitfalls you should look out for:

Not understanding the state of your credit health. We’ve talked a lot about managing your credit health before. You’re likely already aware that your current credit scores influence the type of cards you can apply for, but something else to keep in mind is how your FICO score, one of the most used credit score models, is calculated. FICO scores assess a metric known as a credit utilization ratio, which compares how much debt you owe in relation to your cards’ credit limits, or how much credit is available to you. For example, if you have two credit cards — one with a $600 limit and a $350 balance and another with a $400 limit and no balance — you’d divide $350 by $1,000 ($600 plus $400) to get a credit utilization ratio of 35%. Adding new cards can lower your credit utilization, but if your ratio is already relatively high, it would be wise to wait until you pay down your debt to apply for a new card. FICO (and most other credit score models) also use metrics to determine your credit health, like the average age of your other debts and the types of debt you have. By understanding how your credit scores are calculated and determined, you can get a complete picture of your credit health.

Inconsistent spending habits. Credit card debt, among other types of debt, is something plaguing many Americans, and it’s likely one of the reasons why some people avoid credit cards altogether. While credit cards shouldn’t be feared and aren’t inherently bad, it is true that many people don’t have habits conducive to healthy credit card use. Maintaining a budget, being able to pay off your balances quickly — ideally, before they’re due — and other responsible credit card habits can ensure that interest and fees don’t eat at your rewards and finances.

Working against your lifestyle. Just like it’s not a good idea to pay for a service before actually deciding whether you need it, it’s not a good idea to simply apply for a credit card without understanding its benefits and how they will fit into your lifestyle. Ideally, you should pick a card whose rewards are obtainable through your current spending or lifestyle and whose rewards you know you’ll use. Sure, a 60,000-mile bonus is enticing, but if you wouldn’t normally meet the intro bonus’ spending requirement (e.g., spend $4,000 on purchases in 3 months) or don’t travel regularly, then the card isn’t a good match for you.

What are some of the ways you can benefit from a credit card?

Getting the most out of a credit card requires having a goal in mind and/or working with your lifestyle. We provide examples of both below with our top choices for credit cards and the strategies that will help you get the most out of them.

Using a credit card to reach a goal

If you have a particular goal in mind, like taking a vacation or saving up for new furniture, a credit card might be able to help you make it a reality. Here are a few of the best credit cards for common goals:

Take a vacation: Capital One Venture Rewards Credit Card

rewards credit cardIf you already have a trip in the works, or if you travel regularly, getting a card like the Capital One Venture Rewards Credit Card could be extremely useful, as its miles can be redeemed for travel, statement credit, gift cards and more (note that points hold the most value when they’re redeemed for travel, according to our Travel Rewards Credit Card Analysis). This means that you can apply any earned miles toward future trips or pay yourself via statement credit to reimburse yourself for a previous trip. The card has a generous intro bonus of 50,000 (equal to $500 in travel) for those who spend $3,000 on purchases in 3 months, and cardholders receive an unlimited 2 miles for every $1 spent on any purchase. What’s more, travelers who book and pay for accommodations through Hotels.com/Venture earn an unlimited 10 miles for each $1 spent, and should you choose to become a Hotels.com rewards member, after booking 10 nights, you’ll earn a free night that can be redeemed at any hotel on the site, adding to the Hotels.com benefits!

Since they can be used as a statement credit, booking travel with your miles is easy — you simply book your travel how you like, then redeem your rewards as a statement credit to cover those travel purchases. You also don’t need to have the full value of the purchase to redeem your rewards; for example, if you booked $500 in travel, you can redeem $200 in miles and pay the $300 difference. Alternatively, if you have enough miles available, you can redeem $500 in miles. This flexibility in redeeming rewards will go a long way, especially if you travel regularly or take a major trip annually. The card does have an annual $95 fee, but it’s waived for first-year cardholders and there are no foreign transaction fees. If you find the annual fee unappealing, the Capital One Venture Rewards Credit Card has a sister card — the Capital One VentureOne Rewards Credit Card — which has no annual fees, though its earnings are bit lower. Both cards require good to excellent credit (usually considered a credit score of 700 or higher) for approval.

Make a large purchase without paying interest: Wells Fargo Platinum Visa Card

rewards credit cardZero-percent intro APR credit cards are a boon to those who want a chance to reorganize their financial life. If you’re planning to make a large purchase, like buying furniture or appliances, a card like the Wells Fargo Platinum Visa Card can allow you to finance your spending over several months without the fear of accruing interest. That’s because the Wells Fargo Platinum Visa Card has an 18-month 0% intro APR on purchases and on balance transfers made in the first 120 days (with a 3% intro balance transfer fee for 18 months, then it’s 5%), meaning you can choose to pay down existing debt as well. If you’re concerned about this balance transfer fee, though, you can look at our Balance Transfer Calculator to confirm this card will work for you, as well as see other options. The Wells Fargo Platinum Visa Card, which is available to those with good to excellent credit (usually considered a credit score of 700 or higher), also has no annual fee and gives cardholders free FICO scores every month. As an added card perk, the Wells Fargo Platinum Visa Card also provides cell phone protection to cardholders who use the card to pay their monthly cell phone bill. Should your phone get stolen or damaged, you will be reimbursed up to $600 per claim (with a max of 2 claims per year). There’s a $25 deductible, but this is a small expense for the peace of mind the afforded by the feature.

Taking full advantage of your current lifestyle

Having a card with benefits that reward your current lifestyle is the ultimate win. While credit card rewards aren’t going to make you a millionaire, getting a little extra for simply living your life is still a valuable financial reward all its own. Here are a few examples of the best credit cards for different lifestyles.

For the working professional: Wells Fargo Propel American Express Card

rewards credit cardLiving as a business professional usually comes with a set of expenses you can anticipate. If you’re working a steady professional job, you likely drive to work and parking is a daily or monthly expense. If you don’t drive, you still might be paying to take public transit or hiring a service like Uber or Lyft. Similarly, you probably eat out somewhat often and maybe subscribe to a least one major entertainment service, like Netflix or Spotify. That’s where a card like the Wells Fargo Propel American Express Card comes in. With its well-rounded rewards, it offers generous points on many of these activities. You’ll earn an uncapped 3 points for every $1 spent on gas, dining out, travel (hotel stays, airline tickets, parking garages, transit and more) and popular streaming services (Netflix, Hulu, Spotify and more). On top of that, the card has a sweet 30,000-point intro bonus (worth $300 when redeemed for cash back) that cardholders are eligible for if they spend $3,000 on purchases in their first 3 months. And the card has a 12-month 0% intro APR on purchases and balance transfers (with a 3% intro balance transfer fee for 12 months, then it’s 5%), meaning it can also be used to finance a big upcoming purchase or pay down debt. Where the card really shines is its flexibility when it comes to redeeming rewards, as points can be redeemed for cash, airline tickets, merchandise or gift cards, and they can even be used to pay down eligible Wells Fargo loans and mortgages. As an added perk, cardholders who pay their monthly cell phone bill with the Wells Fargo Propel America Express Card will receive up to $600 mobile protection against covered damage or theft (with a $25 deductible per claim and a maximum of 2 claims per year). All of these benefits and perks come with no annual fee and no foreign transaction fees.

For those raising a family: Bank of America Cash Rewards credit card

rewards credit cardGroceries and gas are likely usually two of your most common expenses for someone raising kids, which is why it could make sense for families to have a card like the Bank of America Cash Rewards credit card. This card offers an exclusive $200 bonus to those who apply online and spend at least $500 on purchases within 90 days of opening their account. It also has a 12-month 0% intro APR on purchases and on balance transfers made in the first 60 days (with a 3% balance transfer fee, $10 minimum). The Bank of America Cash Rewards credit card’s ongoing rewards are equally as impressive, as it earns 3% back on gas and 2% back at wholesale clubs and grocery stores (that accept Mastercard) on up to $2,500/quarter in combined gas/wholesale club/grocery store purchases (then it’s 1% cash back) as well as 1% back on all other purchases. Given the selection of goods at wholesale clubs, this perk alone might make the card valuable to families looking to stock up on food, clothes and electronics. Rewards can be redeemed in a myriad of ways, including as statement credits, checks or direct deposits into your Bank of America checking or savings account — the latter of which earns an ongoing 10% customer bonus or up to 25% to 75% for Bank of America Premier Rewards customers. The Bank of America Cash Rewards credit card also has no annual fee and is available to those with good to excellent credit (usually considered a credit score of 700 or higher).

For any lifestyle: Wells Fargo Cash Wise Visa Card

rewards credit cardNot everyone’s expenses fit into the rewards of the previously mentioned cards. If that describes you or you just don’t want to deal with category purchases, the Wells Fargo Cash Wise Visa Card is probably a better fit for you. This card offers an intro bonus of $200 cash rewards to cardholders who spend $1,000 on purchases in the first 3 months — that’s 20% cash back! It also has a 12-month 0% intro APR on purchases and balance transfers (with an intro balance transfer fee of 3% for 12 months, then it’s 5%). Where the Wells Fargo Cash Wise Visa Card really shines is its cash back rewards, which include an unlimited 1.5% cash back on all purchases as well as 1.8% cash back on eligible mobile wallet purchases (via Google Pay or Apple Pay) made in the first 12 months. Like the other Wells Fargo cards noted in this post, the Wells Fargo Cash Wise Visa Card also has mobile phone protection of up to $600 against covered damage or theft when you use the card to pay your monthly cell phone bill (with a $25 deductible per claim and a maximum of 2 claims per year), provided you pay your cell phone bill with the card. Points can be redeemed as a statement credit, check or for merchandise and travel, and the card also has no annual fee. Finally, it requires good to excellent credit (usually considered a credit score of 700 or higher) for approval.

Not seeing a card that suits your goals or lifestyle? Our reviews of the best credit cards are sure to have a card to suite your needs and spending habits.

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author’s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This content was accurate at the time of this post, but card terms and conditions may change at any time. This site may be compensated through the credit card issuer Affiliate Program.