How to Get the Most Out of Your Credit Card Rewards Program

  • A TD poll finds that about one in five Americans has applied for a new credit card in the past year.
  • Finding the right card and using it responsibly can benefit consumers’ wallets and credit profiles.
  • TD Bank recently launched the TD Double Up Credit Card.

Over the past year, many people have changed where and how they spend their money. Instead of booking flights and concert tickets, many have ordered home workout gear and updated their leisure wardrobes.

And some have strategically adjusted the way they make those purchases to take advantage of credit card rewards programs.

A new TD Bank survey found that about a quarter of credit card holders say they put more of their purchases on credit now than before the pandemic; the main reason is to earn rewards.

While getting a credit card at the checkout is only a small change in behavior, finding the right card and using it wisely can have a big impact on personal finances and long-term credit profiles.

Move daily expenses

While some began to shop more on credit during the pandemic, many people continue to rely on cash transactions. In the TD survey, about half of Americans said they used a debit or check card or cash as their primary method of making daily purchases.

“While using cash can be effective in managing spending, these consumers are potentially missing out on an opportunity to make money on those purchases,” said Paramita Pal, head of US bank cards for TD Bank.

TD recently launched the TD Double Up Credit Card, which offers a cash back program of up to 2%. Double Up credit cardholders can earn 1% cash back on their purchases, with no spin category, and an additional 1% cash back when rewards are redeemed to an eligible TD deposit account. The card has no annual fee or limit, cap or expiration date when redeeming rewards, as long as the credit card account is open and in good standing.1

With the right rewards program, a series of daily fees can add up to a lot of cash back. The TD survey found that the average cardholder spends around $ 800 on their credit card each month. For someone who earns a total of 2% cash back when spending and redeeming in their TD Account, that could amount to almost $ 200 each year in rewards.

Responsible use of a credit card can also help people build a history of paying their debts on time, which can have a positive impact on credit scores. In fact, 28% of TD survey respondents who said they spend more on credit cards now say it was because they wanted to increase their credit, which can be crucial in reaching other financial milestones such as than buying a house or taking out a loan.

It’s important to note that people who switch their spending to a credit card should understand how they work and the basics of responsible use of credit cards, such as:

  • Pay your bills on time every month. Payment history is about 38% of your credit score, so try to pay off your balance in full each month.
  • If you need to keep a balance on your credit card, keep it at a reasonable percentage of your line of credit. Most financial experts recommend limiting the use to 30% of your available credit.
  • Don’t cancel cards you don’t use regularly, unless you’re concerned about annual fees or spending control. Credit history is an important factor in determining credit score.

Rethinking rewards programs

As consumer spending has shifted into different categories over the past year, some have started to reassess whether the cards in their wallets are offering the most value.

According to the TD poll, about one in five Americans applied for a new credit card during the pandemic. Of this group, almost 40% did so because they wanted a different rewards program because their spending habits had changed.

“The results of our survey reinforced the fact that many people want the opportunity to spend how they want and earn rewards on a variety of purchases,” Pal said. “And receiving cash back allows people to use that extra cash however they want or need it, whether it’s supporting a hobby, splurging for a great meal, or covering expenses. essential expenses. “

With many Americans booking fewer flights during the pandemic, some have also questioned whether racking up travel rewards is still worth it. More than 60% of millennials with rewards cards said they wanted to change their travel rewards program, with a third saying the change was a result of the need for extra cash in the form of cash back.

TD’s new Cash Back Card also offers consumers the convenience of seamless redemption into a qualifying TD deposit account.

Learn more about TD Double Up Credit Card terms and eligibility.

This post was created by TD Bank with Insider Studios.

1Read the terms and conditions for important information about APRs, fees, qualifying purchases, balance transfers, and rewards program details. The TD Deposit Account Terms govern the use and any restrictions that may prohibit the deposit or withdrawal of a Trading Bonus.

The TD Double Up Credit Card is only available at TD retail stores.

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