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Understanding Credit Card Rewards

At O1ne Mortgage, we prioritize consumer credit and finance education. This article will help you understand which types of credit card transactions do not earn rewards. For any mortgage service needs, feel free to call us at 213-732-3074.

Cash Advances

Cash advances allow you to borrow against your credit limit and withdraw money at an ATM or using a convenience check. These transactions are subject to high fees and interest rates, and they do not earn rewards.

Balance Transfers

While balance transfers can save you money on interest, they do not earn rewards. Be mindful of balance transfer fees, which are typically 3% to 5% of the transfer amount.

Fees

Credit card fees, such as those for cash advances, balance transfers, or late payments, do not earn rewards. These fees can also reduce the value of the rewards you do earn.

Interest Charges

Interest charges accrue when you carry a balance from month to month and do not earn rewards. Paying your balance in full each month is crucial to maximize your rewards.

Insurance Premiums

Insurance premiums are significant expenses, but they may not qualify for rewards. Check your credit card’s exclusions list before using it to pay your premiums.

Taxes and Government Fees

Using a credit card to pay taxes or government fees may incur convenience fees and may not earn rewards. Consider using other payment methods to avoid these fees.

Gift Cards and Prepaid Cards

Purchases of gift cards and prepaid cards are often considered cash equivalent transactions and do not earn rewards.

Purchases Above the Earning Cap

Some credit cards have earning caps on certain categories. Once you hit the cap, further purchases may not earn rewards or may earn at a lower rate.

Purchases Outside the Bonus Categories

Purchases outside of bonus categories may not earn rewards or may earn at a base rate, often just 1%. Be aware of how merchants process transactions to avoid missing out on rewards.

Purchases Made With Points

Using points to pay for purchases may not earn additional rewards. Consider whether it is better to use your points or to save them for future redemptions.

Returned Purchases

Returning a purchase may result in the deduction of the rewards earned from that purchase. To keep your rewards, consider opting for a store credit or gift card instead of a refund.

The Bottom Line

Understanding which transactions do not earn rewards can help you maximize the value of your credit card. For any mortgage service needs, call O1ne Mortgage at 213-732-3074. We are here to assist you with all your mortgage needs.

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