10 credit card withdrawal errors you need to avoid

According to a 2021 survey, more than half of American adults (59%) have at least one cash back credit card.

However, the same study shows that we do not always fully utilize card rewards: by 2020, 33% of cardholders have not redeemed any rewards.

However, the same study shows that we do not always fully utilize card rewards: by 2020, 33% of cardholders have not redeemed any rewards.

Here are 10 common refund errors to avoid, as well as some tips for earning every dollar from these bonuses.

1. You can’t find the card that best suits your lifestyle

“With a refund card, there are many flavors and options. Depending on your lifestyle and where you spend money, there may be a card that can help you earn more money,” said Marc Bellanger, Visa Customer Marketing Director.

“Calculate your expenses in different categories such as travel, catering, groceries, and so on,” said Julie Pukas, director of card and merchant solutions at TD Bank in the United States. Her advice is: “Really understand what you’re looking for and what you’re spending.”

If you are willing to use your card anywhere, but don’t want to take the time to figure out which card to use every time you make a purchase, a fixed rate cash back card may be the right choice.
Another factor in the equation: annual fees.

“Using a free card is a win-win situation. Some of the best refund cards do not have an annual fee,” said Zach Honig, editor in chief of Points Guy.

2. You saved your bonus too long or did not strategically convert it to cash

“There are definitely consumers who have forgotten to redeem for cash, although this is usually easier than redeeming points or miles,” Mr. Belanger said.

“Frequent exchange of gifts can be a good thing.”

An exception to this rule is when you save your prize money for cash on another card (with a higher interest rate).

For example, if you have a Chase Freedom Flex or Chase Freedom Unlimited card, you will receive approximately 1% to 5% cash back benefits.

However, if you deposit these rewards in a bank and exchange them for using one of the Chase Sapphire cartoons to win the Chase Ultimate Award, you can receive an additional reward worth 25% to 50% points.

Therefore, if you plan to travel regularly, converting a refund into points can help you win a huge bonus.

Expert advice: Using some cards will allow you to exchange your cash back rewards for points or miles on another card from the same publisher.

3. You are skipping registration for these quarterly bonuses

Although some cards offer additional bonuses for specific categories throughout the year, if you register online every quarter, other cards will increase your refund amount in the rotation category – changing quarterly.

In some cases, such as using certain Chase or Discover cards, this may increase your cash reward fivefold.

“If you didn’t trigger these quarterly bonuses, it would be a mistake,” Hoenig said. It’s also a good time to pay attention to new expense categories, so you’re using the card that brings the greatest benefit to your purchase.

Expert tip: Add reminders to your calendar to register for categories that rotate each quarter.

4. You cannot use coupons and shopping portals to increase refunds

Brian Preston, CEO of CFP, Around Wealth, and host of The Money Guy Show podcast.
Preston said, “That would be great if you could accumulate cash back bonuses and discounts through portals and coupon codes.”.

“As a consumer, my advice is’ Don’t be surprised at the amount of (registration) bonuses’ and ensure that the underlying value is beneficial to you in the long run,” he added.

Expert tip: Note and use the coupon application, coupon code, and shopping portal to add your refund bonus.

5. Registration bonuses dazzle you

“Most refund cards have some kind of upfront bonus,” Belanger said.

The average amount of these registration bonuses is approximately $150, requiring you to meet the usual minimum expenses within the first three months of opening an account.

These rewards are a good addition. “But if you plan to use your credit card regularly for a few years, focus on the rate of return on the things you want to buy,” Belanger said.

This way, long after you redeem the bonus, when you use the bonus, you will still have a reward card.

“As a consumer, my advice is’ Don’t be too surprised at the amount of the bonus. ‘Instead, make sure that the underlying value is beneficial to you in the long run,” Belanger said.

Expert tip: Registering for bonuses is great, but make sure you’re not misled by them – instead, choose a card that rewards the things you buy every day in the long run.

6. You are skipping expense limits

Some cards limit the expenditure of cash return rewards. Once you reach the limit, you can still earn cash at a lower interest rate (usually the minimum limit for credit card payments).

This means that you waste the opportunity to maximize the amount of money you spend in return.

Instead, the goal is a cash back card that includes your expenses (overall or by categories such as gasoline, groceries, and dinner), with a small amount of space. Or consider using multiple cards to maximize your cash return rewards.

Costco Anywhere Visa Card ® Citigroup can receive a 4% refund of up to $7000 per year when purchasing qualified gasoline and charging electric vehicles (then 1%). Even at $6 per gallon, it’s about 22.5 gallons per week.

Expert tip: Consider using multiple cards to maximize your cash return rewards, or purchase the right card for you in the categories you spend.

7. You accidentally “automatically pay” with your card

Using a refund card to pay bills is a good way to reach the expense threshold and receive cash rewards.

“Basically, this is a 2% coupon,” Preston said.

“But that doesn’t mean you have to put the bill in automatic mode,” Hoenig said. After often discovering small incorrect fees on invoices, Honig learned that “it is reasonable to consider everything” – and used cards to make electronic payments without having to issue invoices in automatic payment mode.

In addition, if the bill is larger than expected (and exceeds your credit limit), automatic payment may cause your card to expire. Or the payment may even be refused. Any additional fines may cancel any hard earned refunds on your card.

Expert tip: If you still choose automatic payment, please check the statement regularly. This will help you immediately detect payment errors when they occur.

8. You Do Not Evade Foreign Exchange Transaction Fees

Honig said that although many elite reward cards have already eliminated offshore transaction fees, some cash return cards still have such fees.

Foreign transaction fees typically increase your purchases abroad by 3%, and you do not need to become wealthy to be affected. “If you purchase (from a website or company outside the United States), it is worth noting,” he said.

“If you receive a 2% return (in cash) but pay interest, then you deny any potential benefits of a refund card,” Hoenig added.

Expert advice: If you plan to use a refund card when traveling outside the United States or overseas websites, please consider registering for a card that does not charge foreign exchange transaction fees.

9. You brought some balance

“If you get a 2% return (in cash) but pay interest, then you deny any potential benefits of a cash back card,” Hornig said.

According to the American Banking Association, approximately 40% of Americans do not pay their monthly credit card bills. This is a lost game.

The average APR for a refund card is approximately 1.3% per month, so if your refund card pays 1%, you are leaking funds. If you get 2%, you have almost no break even. If you want to get all the juice from your refund card, only spend the money you can pay each month. If you need a card that you can spin occasionally, buy the best 0% APR credit card.

If you have used up the balance that cannot be paid, please remove the refund card from circulation and consider including these bonuses in your current balance.

Expert advice: If you want to get everything you can from your refund card, pay your balance in full every month. This way, if you have a balance, the interest you must pay will not negate your reward.

10. You still depend on the former, the former

In the credit card business, new customers receive generous registration bonuses, promotional rates, and generous privileges. Although it can be difficult to exchange a card, this is usually the only way to exchange a card. This is also a good way to choose the card that will give you the greatest benefit when your consumption habits change.

If you’re doing the right thing, credit card conversions don’t have to lower your credit. If you are considering converting a refund card (and closing the card), please ensure that all bonuses are cashed out before closing the account.

Expert tip: If you are converting a card, please do not leave any rewards on the card you are closing.

Deny editorial responsibility.

The editorial content on this page is based solely on objective comments by our authors and is not driven by advertising funds. It is not provided or authorized by a credit card issuer. However, when you click on our partner’s product link, we may receive compensation.


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