PHOENIX — If you’re not using a credit card with rewards, you could be missing out on hundreds, or even thousands, of dollars in perks each year.
In a recent Bankrate survey, 40% of Americans said they don’t own a rewards card, and 1 in 4 cardholders have let their rewards go unredeemed. Analyst Ted Rossman says that’s like leaving free money on the table.
"My family made more than $2,000 in cash back rewards last year,” Ted Rossman, Bankrate Senior Industry Analyst, said. “It’s almost like getting another paycheck.”
When used strategically, credit cards can do more than cover big-ticket items or financial emergencies. Consumers say they use the rewards programs to help pay down bills, save on travel, and even teach their kids about money.
Misty Wenger, a consumer in Tempe, Arizona, carries four different cards and rotates them based on reward categories.
“There’s different rewards on each one,” she said. “I’m very strategic about how I purchase things.”
Tran Lee, a shopper from Mesa, Arizona, says category cards can offer 5% back on expenses like gas or clothes, and money adds up quickly.
And for Kathryn Langenbach in Peoria, Arizona, cash back goes straight toward her card balance.
“When it’s going right back to the credit card, it’s literally just like free money," Langenbach said.
Others, like Keith Southergill of Phoenix, are putting points toward travel, getting freebies on airfare and hotel stays.
Even teenagers are learning the rewards game: Renata Olguin from Farmington, New Mexico, uses a credit card to help her son build financial discipline.
“It’s kind of a reward for him to pay back what he’s spending,” Olguin said.
Not all rewards cards are created equal. The best card for you depends on your spending habits, Rossman says. Here's a breakdown:
Which credit card is right for you?
- Travel card: Best for frequent flyers
- Category card: Higher rewards on gas, groceries, or dining
- Flat-rate cash back: Simple and consistent rewards on every purchase
“For most people, I suggest cash back because it’s universal and easy,” Rossman said. “If you can get a no-annual-fee, 2% cash back card, that’s surprisingly hard to beat.”
Rossman says the key to making credit cards work for you is to pay off your balance in full each month. With interest rates hovering around 20%, carrying a balance could wipe out your rewards, and then some.
“Credit cards are like power tools,” Rossman warned. “They can be really useful or dangerous. It’s all about how you use them.”
If you’re earning rewards, Rossman recommends putting your cash back into a high-yield savings account. Do not hesitate to switch cards if your current one isn’t meeting your needs.
With the right strategy, Rossman says, those everyday purchases could bring you closer to a free vacation, lower bills, or just a little extra cash in your pocket.
This story was reported on-air by journalist Jane Caffrey at the Scripps News Group station in Phoenix and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
