Get the most from your credit card purchases without sinking into debt

By Benjamin Szweda

AAA World Article

The miles and points that credit card companies bestow on their cardholders can seem to put dream travel destinations within reach and soften the blow to your wallet that booking last minute can cause. You can even reach your destination in first class on a lie-flat bed if you know how to maximize both earning and redeeming miles and points. But can you do it without creating financial problems?


When it comes to earning miles, it’s essential never to spend money you ordinarily would not. In other words, don’t overspend just for the sake of earning rewards. If you have to meet a minimum spend on a credit card to receive a sign-up bonus, consider purchasing gift cards to a store where you shop frequently. Be sure to check first that this is allowed by the credit card’s terms.

Similarly, while it may be enticing to use services like Plastiq to earn even more miles for paying mortgage or tax bills with your credit card, ensure you are not losing value by paying a fee or surcharge.

Remember, too, that the credit cards that offer the best rewards often have the highest interest rates. It’s best to pay off your entire bill every month, especially on cards that charge high interest rates. Just one month of interest can wipe away any rewards you may have earned.


Getting started is simple. You just need one credit card. If you have a favorite airline that you fly all the time, consider that brand’s card. If you are a buy-the-cheapest-ticket type of traveler, consider a bank-issued card, as the points earned by those cards can be redeemed with multiple airlines and hotels. Either way, any card you sign up for will likely earn rewards at least at a one-to-one ratio: one point or mile per every $1 you spend. You can also buy airline miles outright. Airlines will sell you their miles for cash and sometimes throw in a bonus. For example, you can buy 20,000 American Airline miles for $590. Currently, you will get an additional 5,250 miles free, though the offer is subject to change.

There are two things to watch out for when it comes to buying miles. First, don’t purchase miles unless you have an immediate use for them, as their worth can change suddenly as fares fluctuate. Second, it’s essential to understand the cost of acquiring the miles. In the above scenario, each mile cost 2.3 cents ($590/25,250). To figure out the cost, just divide what you paid by the total number of miles you receive. The key to sweet spot redemptions is to get more, or at least equal, value out of your miles than it cost you to earn them.


To maximize earning rates and set off on your dream vacation even faster, you should be aware of any category bonuses your credit card offers. In addition to earning at a one-to-one ratio, some cards offer categories that will earn miles or points at an increased rate. For example, you might receive two miles for every $1 spent at gas stations or four times the points at restaurants.

Review the benefits section of your card agreement and make a list of such bonuses so you can use the right card for each purchase. Taking advantage of category bonuses means you’ll earn points or miles faster, and get that much closer to the reward you want.


If you’re going to turn miles into a reward, taking the time to do some simple math will save you from cashing in hard-earned miles for headphones or a magazine subscription worth much less. Some quick calculations can help you figure out if the reward is a good value or if you’re better off purchasing the ticket or item outright and saving your rewards points for a better return.

The content of this article is for informational purposes only. AAA does not guarantee any particular outcome.