Credit cards can make buying almost everything a bit easier. But wouldn’t you like to make your credit card work even harder on your behalf?

Of course.

A rewards card is a type of credit card that provides you with benefits that come with almost every purchase. What are these benefits?

Some rewards credit cards provide you with cash back on eligible purchases, either as a rebate detailed on your monthly statement or as a direct deposit into a designated account.  

Other rewards cards let you accrue points with purchases. Depending on the issuer, those points can be applied to travel or the purchase of a wide variety of products.[1]

“There are all kinds of rewards cards available,” states Lakhbir Lamba, PNC’s head of Consumer Lending. “If you’re smart about using them, rewards can absolutely enhance your life. Some, such as cash back cards can help stretch your monthly budget. Meanwhile others could help pay for a vacation or save you a lot of money.”

Whether it’s points or cash in the bank, rewards cards are a terrific option when used the right way.

First, Conduct A Little Research

As mentioned earlier, not all rewards cards are the same. When choosing, that means your most important question is, ‘What kind of rewards do I want the most?’

As one example, PNC has a number of rewards credit cards, each one suited to meet a particular need. The ideal card for someone often depends on your goals and spending habits. What seems perfect for one cardholder might not resonate with another. Some cardholders might be all about the money. Others see their credit card as a way to help them see more of the world on a budget.

There are also other factors to consider. Does that card have attractive terms? In the case of a rewards credit card offering points, how quickly do those points expire? What limitations exist?

Lamba offers some wisdom when it comes to evaluating cards.

“Comparing different cards, their terms, and interest rates is always recommended. In the case of points, pay close attention to the offer terms. After all, the last thing you want is to save points over an extended period, only to see those points vanish when that offer period lapses. Or have blackout dates for travel. Or have limits on how many points you can accrue. Above all, redeeming points should be quick and convenient for the credit card holder.”

At the same time, it’s always good to know the basics, namely the credit card’s terms, interest rate, annual fees, security features, and perks such as introductory rates, and balance transfer offers. As a precaution, pay special attention to any restrictions that might be buried in the fine print.

And of course, some issuers offer sign-up bonuses that take effect once you’ve reached defined levels of use—which could potentially kick start your rewards in a hurry.[2]

Make Every Purchase Count

Ready to get those rewards working for you? It pays to carefully read your monthly statement or your e-mail from the credit card issuer. Yes, it really, really pays.

“Credit card companies are always coming up with new offers, sometimes in conjunction with retailers or hotels or other affiliated partners,” offers Lamba. “Sometimes the offer might be a significant discount. Or an extra night’s stay. Or bonus miles. And those offers change all the time.”

That means staying on top of what communications your credit card issuer sends your way. Yes, it takes a few extra moments to research, but chances are it will really be worth your while.

It’s Not Just What You Spend, But Where

As mentioned earlier, not all rewards credit cards are the same. As one example, one cash back rewards card might rebate significantly more on purchases of gasoline while another really shines when it comes to buying groceries or dining out.

If you have a diverse portfolio of rewards cards, then, the smart money is on being aware of where you’re shopping, what you’re buying, and which card to pull from your wallet. That way, you’ll use each one to your very best advantage.

“It’s always fun when you find these boosters,” offers Lamba. “I can look at my online banking and my mobile app and say, ‘Wow if I use my card at this store, I’ll get 3% cash back and an additional 10% by using this card within the dates of the offer.’ You’d be surprised at how much you’ll save.”

Further, depending on the credit card issuer, you’ll have the chance to earn bonus points of 25%, 50%, or even more above the base points you’d normally expect to earn on a purchase. Those bonus points might be tied to particular spending categories, balances in bank accounts, and other requirements. If you’re astute and keep those opportunities in mind, you could accumulate points at a faster pace.[3]

Now The Fun: Redemption

If you have a cash back rewards card, you’ll see the results in your monthly credit card statement. However, when it comes to points, you definitely want to see the fruits of your spending.

How many ways can you redeem your points? It depends on the issuer. But, depending on the terms of your rewards card, you may be able to redeem your points in several different ways, including:

  • Gift cards to affiliated retailers;
  • Airline reservations;
  • Hotel stays;
  • Name-brand merchandise;
  • And more.

Points are usually redeemed via the lender’s app, by visiting the card issuer’s website or calling a specified telephone number. This information is found in the Terms and Conditions of your credit card, along with specific provisions, exemptions, and other important information. It is recommended you review this information as early as possible when considering redeeming your points.

But above all, redemption should be easy. As Lamba points out, “The goal for the customer should be to redeem what they want, how they want, and when they want. It should be easy. If I want to redeem at 3 a.m., then the credit card issuer should make it effortless. That’s the true mark of a good rewards program.”

But It’s Still A Credit Card

In all the fun of accumulating points and deciding how to spend them, it remains important to both maintain a good payment history and follow all the other stipulations when it comes to usage. As Lamba concludes, “Know the Terms and Conditions of your card and stay current. With any card issuer, your privileges could be suspended or even revoked if you don’t live up to your obligations.”

But if you use your rewards credit card responsibly, it could pay off for you big time. All you need is a little savvy.