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Is it Worth Using a Reward Credit Card?

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Over the past number of years, credit card companies have really ramped up the incentives to try and get you to sign on. These can range anywhere from cash back bonuses to mileage bonuses to long periods with no interest. They can even be a combination of any of those three.

Credit card companies give these incentives in order to get you to apply for their card, use their card, and then hopefully continue to use their card after the promotion or incentive is over with.

Well, a few months ago, I finally decided to jump in to using credit cards for points. I’ve primarily stayed away partially because of still having some credit card debt, but mostly because of the amount of time it can take to manage credit cards.

Here are some key takeaways that I’ve pulled from finally using a points credit card.

Is it Worth Using a Rewards Credit Card Pinterest

The Incentives Are Very Satisfying

My wife and I both applied for Chase Freedom Unlimited cards. In addition to 15 months of no interest as an introductory rate, they have a promotion where if you spend $500 on the card within the first three months, you get $150 back in points.

We were able to reach this pretty easily on both of our cards simply by using them to pay some bills and groceries.

Well, let me tell you! When we got the direct deposit in our bank account for a total of $300, I had a grin from ear to ear. I literally didn’t do much to earn that money. I just opened two credit cards and spent some money I was already going to be spending anyway.

Not a bad deal!

It’s Easy to Lose Track

So this goes more for managing multiple credit cards to maximize your rewards or get multiple rewards, but I confused myself at times trying to keep track of what card was used to charge what bill.

We were using the two aforementioned Chase Freedom Unlimited cards plus a regular Chase Freedom card for the 5% category. I had to make sure I was paying attention and placing the right transaction in the right card when purchasing/paying bills and with recording them.

I can see this becoming a bigger issue as you are juggling more cards and trying to get a bunch of different promo offers. This one is entirely up to you. If you think you can handle multiple cards, then by all means, have at it! 🙂

Which brings me to my next point…

The Primary Worth is From Incentives

So if you are looking for a “do-it-all” card where you can get a ton of mileage or cash back rewards, I’m sorry to say it doesn’t exist. Believe me, I’ve looked.

If you are using one card for mileage points, for example, you would have to spend thousands of dollars to get a one way ticket worth about $500. Take the United MileagePlus Explorer Card from Chase, for instance. If you spend $1,000 in the first 3 months, you get 30,000 bonus miles. NerdWallet values United miles at 1.7 cents for each mile. At that price point, 30,000 miles is worth roughly $510. On average, that’s two round trip tickets, depending on where you go.

Now without the incentive, you receive 2 miles for every $1 spent on United tickets and 1 mile per $1 spent on every other purchase. Even if ever dollar you spent got you 2 miles, you’ve have to spend $15,000 to be eligible for two free round trip tickets worth $510. To me that isn’t worth it without the incentives.

The best way to actually get a lot of mileage points or cash back points is to open a card or two, spend enough to get the incentives, quick using the card, open another one, rinse and repeat. Then you can keep getting the reward incentives. You just have to make sure that you can meet the minimum amount you have to spend in the given period.

ThePointsGuy.com is a great resource if you’re looking for extensive research on credit card mileage programs.

It’s Still a Lot of Work

That being said, it may be worth it. In your financial situation, you may be able to to really maximize your points or rewards by opening up 3 or more credit cards at a time. I would just look into if the mileage points or cash back rewards expire.

For now, I’m going to keep using my Chase Freedom Unlimited card at 1.5% cash back combined with my Chase Freedom card for 5% in certain categories quarterly.

What are your thoughts? Do you have experience with points or cash back cards? What do you recommend? 

Sound off in the comments below!

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I'm Tim Jordan

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