“Maximizing Your Credit Card Rewards: What You Need to Know”

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Maximize Your Rewards: Understanding Non-Rewardable Credit Card Transactions

At O1ne Mortgage, we prioritize consumer credit and finance education. This post aims to provide an objective view to help you make the best decisions regarding your credit card transactions. For any mortgage service needs, call us at 213-732-3074.

Cash Advances

Cash advances allow you to borrow against your credit limit and withdraw money at an ATM or using a convenience check. These transactions come with high fees and interest rates, and unfortunately, they do not earn rewards. This also applies to cash equivalent transactions like wire transfers and peer-to-peer money transfers.

Balance Transfers

While balance transfers can save you money on interest, they do not earn rewards. Taking advantage of a 0% promotional intro offer can give you 12 to 21 months to pay off your balance without interest. However, balance transfer fees, typically 3% or 5% of the transfer amount, should be considered.

Fees

Credit card fees, such as those for cash advances, balance transfers, or late payments, do not earn rewards. These fees can also reduce the value of the rewards you do earn. It’s essential to weigh recurring fees like annual fees against the potential rewards.

Interest Charges

Interest charges accrue when you carry a balance from month to month and do not earn rewards. Paying your balance in full each month is crucial to maximize your rewards and avoid interest costs.

Insurance Premiums

Insurance premiums are significant expenses for many families, but they may not earn rewards. Check your credit card’s list of exclusions to see if your premium payment qualifies for rewards.

Taxes and Government Fees

Using your credit card for taxes or government fees may incur a convenience fee and may not earn rewards. It’s often better to use a payment method that doesn’t charge fees for these transactions.

Gift Cards and Prepaid Cards

Purchases of gift cards and prepaid cards may be considered cash equivalent transactions by some credit card issuers and may not earn rewards. Be aware of this when using your credit card for such purchases.

Purchases Above the Earning Cap

Some credit cards offer higher rewards on certain purchases up to a specific amount. Once you hit the earning cap, further purchases in the same category may not earn rewards or may only earn at the base rate.

Purchases Outside the Bonus Categories

Purchases outside the bonus categories may not earn rewards or may only earn at the base rate. Be mindful of how merchants process transactions, as this can affect your rewards.

Purchases Made With Points

Using points to pay for a purchase may not earn additional rewards, even if the purchase would typically qualify. Consider whether it makes more sense to use your rewards or to save them for future redemption.

Returned Purchases

Returning a purchase for a refund may result in the rewards being deducted from your balance. To keep your rewards, consider opting for a store card or gift card instead of a refund to your credit card.

The Bottom Line

Most credit card issuers do not offer rewards on cash advances, balance transfers, fees, and interest. Review your credit card’s rewards guide to understand which transactions may not qualify for rewards. If you’re shopping for a new rewards credit card, ensure you have good to excellent credit to qualify for the best options. Check your credit score before applying to find the best match for your profile.

For any mortgage service needs, call O1ne Mortgage at 213-732-3074. We’re here to help you make the best financial decisions.

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