How to Make Credit Card Rewards Part of Your Cash Flow and Financial Planning

By Published On: June 8, 2023Categories: Wealth Building3.4 min read

Credit cards are a popular cash flow management tool among U.S. households. The average American holds 4 credit cards and for decades, we’ve used them to pay for family vacations, gas, or unexpected expenses. But COVID-19 has changed many of our habits and financial behaviors.

Since the pandemic, many of us prefer to stay local over travel and choose takeout instead of dining out. Studies suggest that a significant portion of our budget has shifted to grocery delivery, streaming services, and home entertainment – and credit card issuers have been quick to pick up on this trend.

Today’s rewards programs offer huge perks when you choose to credit over debit for your everyday expenses. That’s why we want to make credit card rewards part of our financial planning conversation, because 55% of card users are not taking full advantage of their rewards. And if you’re still buying your essentials with cash, you’re leaving money on the table.

Time to Rethink Your Credit Card Behaviors

Credit cards can be a powerful tool to organize your spending habits. But their benefits go far beyond cash flow and credit management. Especially if you are among the 66% of cardholders who pay off their bills in full each month, saving your card for major purchases is a missed opportunity to earn thousands of dollars in rewards.

With that in mind, we advocate for regularly paying off your credit card bill as the debt and interest incurred for not doing so will negate the benefits of the credit card rewards

The following are some of the best ways to leverage credit card rewards based on your spending preferences and expected life events:

Get Good Old Cash Back

When you like to keep things simple, Cash Back is king. It’s a straightforward system: the more you use your card, the more cash back you earn.

Cash back is a good option for those who:

  • Don’t carry credit card debt from month to month
  • Use the same card for all your purchases
  • Prefer to choose how you spend your cash back

Swipe to Earn Miles

If you know you travel often, you can use your credit card to pay for household expenses like utilities or childcare and earn points to take stylish trips. With so many types of travel rewards, you can choose a credit card that’s affiliated to your favorite airline, a particular hotel chain, or one with a dedicated booking portal.

To maximize your travel benefits, you can:

  • Hold a variety of credit cards with different travel perks
  • User your points to earn free checked bags or priority boarding
  • Upgrade your hotel rooms

Keep Rewards Versatile with Transferrable Points

If you’re looking for flexibility in your rewards, a card with transferrable points offers great convenience. This is a good option for cardholders with a varied lifestyle who want to go beyond travel and cash back to:

  • Pay for purchases at the stores where you already shop
  • Redeem points for gift cards
  • Enjoy fine dining experiences

Score Big with Sign-Up Bonuses

Sign-up bonuses are a more sophisticated strategy for credit card users to earn rewards points. Since many of them require a minimum purchase, you can plan your sign up when you know you have a large purchase coming up and take advantage of significant rewards. When looking at cards with a sign-up bonus, consider factors such as:

  • The cost of annual fees
  • The impact that opening new accounts has on your credit score
  • The tax consequences of sign-up bonuses

How to Maximize the Perks

With an intelligent strategy behind your card usage, you can redeem rewards to elevate your lifestyle.

Finding the right card for your family can offer access to:

  • Airport lounges
  • Department store credit
  • Streaming services
  • Regular cashback offers
  • Free upgrades

To tap into the benefits of credit card rewards and make them part of your cash flow strategy, talk to your advisor today. By analyzing your spending patterns, our team can help you make the most of your rewards allow you to benefit from your responsible credit card usage.


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