3 Reasons to Use Your Credit Card Rewards Sooner Rather Than Later

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  • Many people use rewards credit cards to get rewarded for their spending.
  • Make sure that you use your rewards sooner rather than stashing them for later.
  • If you hoard your rewards, they may become less valuable as card issuers change program terms over time.

Rewards credit cards offer a fantastic way to earn rewards when you make purchases with your cards. But it's a good idea to use your rewards, rather than hoarding them. For many credit card rewards enthusiasts, knowing when to make a redemption can be tricky -- especially if there are several flexible redemption options that sound great. It's best not to overthink it. Using your rewards sooner rather than later can allow you to get the most from them.

1. Rewards programs can change

It's not uncommon for credit card rewards programs to change over time. Credit card issuers may decide to make minor program changes or alter the entire structure of a reward program. When this happens, it can be frustrating for those who still have rewards because they may have to devise a new redemption strategy with the new program changes in mind.

Let's imagine your credit card rewards program allows you to transfer your rewards to several travel partners for hotel stays and flights. There may come a time when one of the listed partners is no longer part of the rewards program, which could mean you need to change your redemption plans. As you earn rewards, don't assume that program changes won't occur.

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2. Your rewards may become less valuable

Another reason to use your rewards sooner rather than later is the risk of devaluation. Have you noticed how some restaurant and retail loyalty rewards programs become less valuable with time? A free Chiptole burrito that cost 1,250 points in 2019 now costs 1,625 points in 2023. Credit card rewards are similar. When you let your rewards sit unused, there is a risk that they will become less valuable due to program changes, and those changes may cost you.

For example, let's imagine you have a travel rewards credit card and decide to use your rewards to book an award flight. An award flight that costs 40,000 miles today may cost 50,000 miles in a few months or a couple of years. To maximize the value of your rewards, it's in your best interest to use your points, miles, or cash back as soon as possible.

3. Your unused rewards may cost you money in fees

It's possible to find a rewards credit card with no annual fee. However, some of the best rewards credit cards have pricey annual fees in exchange for the benefits offered. Don't forget to consider the price you're paying to use a rewards card.

If you're paying a yearly fee to use your card, you'll continue to pay that fee every year while it remains in your wallet. When you let your rewards sit unused, they become less valuable each year -- yet you'll continue to be charged a fee to use your card. All the money spent on annual fees adds up, impacting your personal finances.

Don't wait for the perfect credit card rewards redemption

If you have a collection of rewards you're stashing for the perfect redemption, do this instead:

  • Research your redemption options thoroughly to understand your options.
  • Redeem your rewards soon to maximize their value.

Using credit cards responsibly can teach you how to manage your money better and may help you improve your credit score. You can also use credit cards to earn rewards. If you're not yet earning rewards on your everyday spending, check out our list of the best rewards credit cards.

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