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When you have a solid credit score, you’ll often find that you’re eligible for a credit card with seriously sweet perks. But qualifying for a credit card with perks is just the beginning. Maximizing these perks requires smart spending and planning on your part. Here are some mistakes to avoid if you want to make the most of your credit card perks.

Carrying a balance from month to month

Credit card rewards are only a good deal if you pay off your full balance each month. The reason? The average credit card APR was above 24% as of mid-2023. Even if you have a good credit card APR, the interest you pay will quickly wipe out the value of the rewards you earn.

Only charge what you can afford to pay off at the end of each billing cycle, no matter how generous the rewards program. If you’re carrying a balance, consider a balance transfer credit card with a long 0% temporary APR so you can knock out your debt before you focus on rewards.

Choosing a card that doesn’t sync with your spending

I got my first travel rewards card about a decade ago. I couldn’t afford to travel more than once a year and I rarely dined out, so I was only earning 1% cash back on most of my spending. (Travel rewards cards give you more points when you spend on things like airfare, hotels, and restaurant meals.)

Back then, I would have been better off signing up for a card that offered a higher across-the-board cash back rate, like the Citi Double Cash® Card. The card lets you earn 2% cash back when you spend on the card and pay off the bill, so I could have earned twice as much cash back on my everyday purchases.

Now that I travel a lot, a travel rewards card is a much better fit. For example, I recently got the Chase Sapphire Reserve®, which gives you 10x points on hotels, 5x points on airfare purchases, and 3x points on dining purchases, plus a host of other travel benefits, like free airport lounge access, a $300 travel credit, and trip protection. Because traveling is now one of my biggest spending categories, these perks easily justify the card’s $550 annual fee.

If your regular spending doesn’t align with the card’s rewards program, look for a different card that lets you maximize points on your everyday purchases.

Not spending enough to get the welcome bonus

The welcome bonus is often among the sweetest perks of a new credit card. For example, suppose your credit card offers a 60,000-point welcome bonus when you spend $4,000 during the first three months. If the card regularly pays you 1.5 points for every $1 you spend, you’re earning 10 times the regular point value if you hit the $4,000 threshold.

That’s not to say that you should spend money you wouldn’t otherwise be spending, of course. But it may be worth switching up which credit cards you use for your monthly bills and everyday spending, so you can hit the bonus threshold. Or if you’re planning a big purchase, you may want to use your new card so that you can earn those points.

If you don’t think your planned spending is enough to earn the credit card welcome bonus, you might look for one with a lower spending requirement, even if the offer means you earn fewer points.

Not taking advantage of lesser-known perks

To take full advantage of your credit card’s benefits, read the fine print. You may be eligible for benefits beyond the points and welcome bonus. Many credit cards offer perks like trip cancellation protection or cellphone insurance, which can save you on purchasing additional insurance. Or you may be eligible for a monthly credit for streaming services or Uber Cash. These lesser-known credit card perks could be worth hundreds of dollars during the course of a year.

How to choose a card with the right perks for you

Even if a credit card has an extremely lucrative rewards program, that doesn’t mean it’s the right card for you. Many of the best rewards credit cards also charge annual fees to the tune of hundreds of dollars. If you won’t earn enough in rewards to offset the annual fee, that’s a sign that the credit card isn’t the right fit for you.

Finally, only sign up for a credit card if you’ll pay off the balance each month, or the card has a temporary 0% APR and you have a solid plan to pay it off before interest starts accruing. Even the best credit card perks aren’t enough to outweigh the cost of credit card interest.

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