5 Mistakes to Avoid When Using Reward Credit Cards (2025 Guide)
Reward credit cards are a great way to earn points, cashback, or miles for everyday purchases. But if you’re not careful, these perks can cost you more than they’re worth. Whether you’re new to credit cards or a points junkie, here are five common mistakes to avoid when using reward credit cards in 2025.
1. Not Paying Your Balance in Full
This is the #1 mistake. Carrying a balance means you’ll pay interest—usually between 18% to 25% APR—which easily cancels out any rewards you earn. Always pay your statement in full every month to truly benefit from your rewards card.
2. Ignoring Spending Categories
Many reward cards offer higher returns on specific categories—like 5% on groceries or 3% on gas. If you’re using the wrong card for the wrong purchase, you’re leaving money on the table. Match your card to your spending habits to earn the most rewards.
3. Missing Out on Signup Bonuses
Signup or welcome bonuses can be worth $200–$1,000, but you usually have to spend a minimum amount in a few months. Set reminders and track your spend to hit the bonus threshold in time.
4. Letting Rewards Expire
Some rewards points expire if your card is inactive or if you close the account. Always check the expiration policy of your credit card issuer. Redeem points before they vanish!
5. Redeeming for Low-Value Options
Using your points for gift cards or merchandise often gives you lower value. Instead, redeem for travel or statement credit to maximize each point or cashback dollar.
💳 Bonus Tips for Smarter Rewards Usage
- Use a spreadsheet or app to track your cards and spending categories.
- Pair multiple cards (e.g., 1 travel, 1 cashback) for all-round rewards.
- Check for limited-time offers or rotating categories every quarter.
🚀 Maximize, Don’t Minimize
Used wisely, reward credit cards can help you earn free flights, hotel stays, or cash back. Avoiding these five mistakes will help you get the most out of your cards without falling into debt traps.
Pro Tip: Looking for the best reward cards in 2025? Check out our Top Credit Cards for Cashback & Rewards in the USA.
Disclaimer: Always check card terms and APR before applying. This content is for informational purposes only.