If you enjoy earning free stuff but don’t want to go on a getaway, earning points for gift cards or a statement credit might be your best bet. With a gift card in your wallet, you might actually treat yourself instead of paying household bills or groceries. And if you don’t want to go the gift card route, having a statement credit on your card might make it easier to do something special for yourself. But, which card should you choose? The following rewards credit cards offer some of the best options when it comes to redeeming your points for gift cards and/or statement credits: [This article was first published on The Simple Dollar in 2020. It was updated in March 2022.] Best of all, Discover promises to match the cashback you earn during your entire first year. If you plan to use your card often, this can be a huge boon – and of course, it can definitely help you earn more gift cards. Not only can you redeem your cashback for a statement credit, but the Discover it Cash Back card makes it easy to turn in your cashback for gift cards as well. With this card, you’ll earn an astounding 6% back on your first $6,000 in grocery spending at U.S. supermarkets each year (then 1%), which will lead to $360 in rewards if you maximize this category. Earn 6% cashback on select U.S. streaming subscriptions plus 3% cashback at U.S. gas stations and on transit, including taxis/rideshare, parking, tolls, trains, buses, and 1% cashback on all other purchases. While this card does charge a $95 annual fee ($0 intro annual fee for the first year), the welcome bonus alone more than covers it, and if you spend a lot of money at U.S. supermarkets, you’ll recoup that investment several times over.And, if you buy a gift card for another retailer at a U.S. supermarket, you’d earn 6% cash back for the purchase. That means cardholders are able to earn that high 6% rate outside of grocery stores. Here are some additional tips that can help:
Use your card for everyday expenses and bills
Since the number of rewards you earn is tied directly to how much you spend, putting as much on your card each month as you can get away with is the smartest way to beef up your point balances quickly. Aside from groceries at U.S. supermarkets and U.S. gas stations, see if you can pay other bills like your cell phone or Internet, utilities, kid’s activities, and even insurance payments with credit.
Always pay your bill in full right away
Credit cards are best used as a complement to your budget. In other words, you should only spend the money if you have the cash in the bank to back it up and pay your card off right away. That second part – paying your bill off right away – is especially crucial as you build good credit habits. It can even be smart to pay your bill off a few times each month if that helps you stay on track.
Don’t use credit as an excuse to overspend
Using a credit card makes it easier to overspend, forget how much you have spent already, or knock your budget entirely off track. To avoid that trap, get in the habit of tracking your credit purchases as the month ticks on. If you keep a running total, you’ll be in good shape to keep yourself out of trouble as you pursue rewards.
