Inflation remains near a 40-year high. Here’s the unpleasant thing that’s doing to your credit card rewards (and what you can do about it)


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Inflation is affecting a lot of things these days: grocery bills, gas bills, and something else you might not have considered – your credit card rewards.

In fact, many credit card rewards programs have spending limits, and high inflation-driven prices cause you to reach those limits much earlier than you might otherwise have. “Your weighted average rewards are lower because it’s easier to reach the spending limit, and then the extra spending earns smaller rewards, such as going down from 5% cash to 1% beyond the limit,” says Ted Rossman, CreditCards.com Senior Industry Analyst. .

Matt Schulz, chief credit analyst at LendingTree, says: “This is especially true in the grocery store. American Express Blue Cash Preferred offers a very strong 6% cash back on grocery purchases of up to 6,000 dollars annually, which is $ 500. [per month] in grocery spending, “says Matt Schulz, chief credit analyst at LendingTree. Even before inflation soared, many American families spent so much every month on groceries and now even more.” that a lot of Americans aren’t earning as much with their credit card as they used to and that’s the last thing someone needs in a time of very high inflation, ”Schulz says.

How To Fight Inflation In Your Credit Card Rewards

“One way to avoid this is to have multiple credit cards so you can switch to a new one once you’ve exhausted your spending limit on a certain category on another card,” says money-saving expert Andrea Woroch. Although, of course, you have to pay your bill in full and on time each month.

When comparing cards, “consider the amount and time period. For example, a monthly limit of $ 500 and an annual limit of $ 6,000 can reach $ 6,000 for 12 months, but if your spending is uneven, the annual limit would be preferable, “says Rossman. If you have a month in which you spend $ 1,000 in this category and another when you spend $ 0, you will do better with an annual limit than with a monthly limit that you could exceed a few months and below others.

As for the cards with the highest spending limits, Rossman highlights the American Express grocery card for groceries, which offers 4x points at up to $ 25,000 in annual spending at U.S. supermarkets. And some cards have no spending limit. If you spend a lot on gasoline, the PenFed Platinum Rewards Visa Signature card may be your best bet, says Rossman, as it offers 5x unlimited points on gas pumps. “Those who spend less could gain more value with a card like Sam’s Club Mastercard, but their 5% cashback is limited to $ 6,000 in annual gas spending,” says Rossman.

Keep in mind, however, that some of the credit cards with the best reward offers and the highest spending limits often require good credit. “Take the time to improve your credit score so you can qualify for one of the strongest programs,” says Woroch. And you know that rewards are not worth it if you also pay interest on your cards.



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