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With prices soaring for everything from food to utility bills, consumers are looking for ways to save. Increasingly they are turning to credit card reward points to fight inflation.
It makes sense, given America's penchant for credit cards. According to a recent Wells Fargo survey, 71 percent of people living in the U.S. have a credit card that offers cash back or rewards. Of those cardholders, nearly half (49 percent) are relying on rewards points to offset some of the costs of everyday purchases.
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But they aren’t doing it as efficiently as they could. The same Wells Fargo survey found only 53 percent of rewards cardholders focus on high-value categories when they use their card, while 38 percent have not cashed in their credit card rewards or offers this year.
“It’s important for consumers to fully understand all of the benefits their rewards card offers in order to make the most of their purchases and to help defray some of the cost of rising inflation,” says Krista Phillips, head of branded cards and marketing at Wells Fargo. “If you aren’t aware or don’t prioritize the categories that can earn you the most rewards, you may be leaving money on the table.”
The good news is there are ways to maximize your savings, including these seven:
1. Know your spending style
A rewards card that gives you the most points when you travel wouldn’t make sense if you’re a homebody. Nor would a credit card with cash back at the pump if you live in the city and don’t own a car. To get the most of your rewards points, it's important to understand the type of spender you are. “You ultimately want to get a credit card that gives you more cash back, points or airline miles based on the categories you spend the most,” says budgeting expert Andrea Woroch. “Look for a credit card that gives you more back for the category you spent the most.”