Credit card bonus programs offer a good opportunity to get more out of everyday expenses. We have summarized here how you can benefit from purchasing.
Some credit cards on the market have special bonus programs that are intended to attract potential new customers and encourage them to sign up. Credit card rewards programs promise credit card holders to turn their everyday spending into seemingly attractive rewards and benefits. These include travel discounts as well as cashback options or exclusive offers. But are the often high-priced premium cards really worth it? And how easy is it to use the bonus programs? We give a few tips on how to get the most out of the bonus programs.
Choosing the right credit card
Choosing the right credit card is the first step to benefiting from bonus programs. Not every credit card suits every lifestyle, so everyone should carefully analyze their own expenses and the need for possible additional services. Some cards offer bonus points for specific categories such as travel, restaurants or supermarkets. Others have higher percentages of cashback up their sleeve instead. It helps to compare the different offers thoroughly to find the right credit card. The following points should be taken into account:
- Amount of the annual fee: Some cards come with high fees, which should be offset as much as possible by the bonuses collected.
- Bonus structure: Which categories offer the most points or cashback?
- Exclusive benefits: Does the card offer additional amenities such as travel insurance, lounge access or discounts at partner companies?
A credit card with its own bonus program and the ability to collect points is the American Express Platinum Card. With the connected Membership Rewards program, one Membership Rewards point is credited for every euro of card sales. Another advantage: There are currently 55,000 Membership Rewards points as a welcome bonus when you take out the card. The points can be redeemed for travel, purchases or vouchers, and card transactions can also be used to pay for them later. The catch: In the first six months after taking out the card, 13,000 euros must be spent with the card. Another drawback: the premium card costs 60 euros per month. Amex wants to offset the high costs by allowing Platinum card holders to participate in the Membership Rewards program. The company also offers many other additional services for the card, which are particularly worthwhile for frequent travelers.
Understanding credit card bonus programs
In order to fully exploit the potential, users should understand the respective bonus program carefully. Each program has its own rules and conditions. Welcome bonuses often offer a significant boost in points or cashback, which can be well worth it if used correctly. In addition, there are sometimes seasonal or time-limited promotions that offer extra points for certain categories:
- Welcome bonuses: High points for new customers after a certain spending threshold
- Category bonus: increased points for purchases in specific categories such as travel or groceries
- Special promotions: limited-time offers that provide additional rewards on certain transactions
Typical credit card bonus programs
Depending on the credit card provider, there are different options when it comes to bonus programs. These systems are common:
- Collect points: For money that is spent with the credit card, there are points that can be collected and then used.
- Cashback: When paying with certain cooperation partners, a set percentage of the amount is credited back.
- Earn miles: Airlines often cooperate with credit card providers. When booking with these cooperation partners, you can collect miles, which can then be used for upgrades or discounts.
An example of a credit card that can be used to collect miles is the Eurowings Premium Credit Card. There are currently 3,000 welcome miles for new customers, another advantage: the credit card is free in the first year. After that, however, an annual fee of 99 euros is due.
Strategies to maximize benefits
If you specifically use the credit card with an attached bonus program, you can significantly increase the points and rewards you collect. For example, it makes sense to spend your day-to-day spending primarily with the appropriate card, especially if you can collect points for every euro you spend. With some cards it also makes sense to take part in partner programs or take advantage of additional offers to further increase the bonus points. The following strategies can help:
- Expenditure: Concentrate large purchases and regular expenses on the card with the bonus program
- Use partner programs: Take advantage of cooperating partner programs that offer additional bonuses
- Regular check: Check credit card offers and promotions regularly and act accordingly
If you would rather benefit from cashback instead of collecting points, you will also find numerous providers for this, such as Hanseatic Bank, Santander Consumer Bank or TF Bank. With the Mastercard Gold from TF Bank, for example, you get five percent cashback on travel and rental cars. But be careful: Cashback will only be paid out if you pay with the respective credit card. By the way, TF Bank’s Mastercard Gold has no annual fee.
Pitfalls and how to avoid them
Although bonus programs offer many advantages, there are also pitfalls that should be taken into account. One of the biggest dangers is getting into debt through excessive use of your credit card. It is important to always keep your expenses in check and pay your monthly bills in full to avoid high interest costs. Another pitfall are the often complicated conditions and expiry dates of the bonus points. To avoid these problems, users should consider the following aspects:
- Stick to budget: Only spend as much as you can afford to pay off your monthly bill in full.
- Note expiry dates: Check your points balance regularly and ensure that points do not expire.
- Understanding Conditions: Read the terms and conditions of the bonuses carefully to ensure that all criteria are met.
Conclusion
Credit card bonus programs offer the opportunity to earn additional profit from everyday expenses. By carefully selecting the right card, having a thorough understanding of the specific rewards program, and strategically planning your spending, you can maximize the benefits. However, it is equally important to be aware of the potential pitfalls and use your credit card responsibly. If you follow these tips, you can get the most out of the bonus programs.
Source: Stern
