Choosing your own rewards makes it easier to cash in

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Sharp Credit – Credit News – Credit Information

Kelly Dilworth

Personal finance writer
Specializing in new trends in credit

Choosing your own rewards makes it easier to cash in

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If you’re in the market for a new rewards card, you don’t have to stick with preset rewards categories and inflexible bonuses. You can instead tailor your rewards, based on how you spend. 

Earlier this month, Bank of America redesigned its signature cash back credit card so consumers can choose which rewards category they receive 3 percent cash back in. For example, if you drive a lot, you can choose to get 3 percent cash back on every gas purchase. Or if you spend more money on groceries, you can opt for a bonus on supermarket spending instead. 

Alternatively, you can choose to receive 3 percent cash back when you shop online, dine out at restaurants, travel, shop at a drugstore or furnish your home (up to $2,500 in quarterly spending). 

The U.S. Bank Cash+ Visa Signature Card is similar. It lets you choose your bonus categories from a variety of purchase categories, such as clothing stores, cell phone providers, supermarkets, movie theaters, fitness centers, furniture stores and gas stations. Cardholders can pick two categories for earning 5 percent cash back (up to $2,000 in purchases per quarter) and another category for earning 2 percent cash back. 

Similarly, the BBVA Compass ClearPoints credit card lets you choose from an even bigger selection of bonus categories, including some that are hard to find on other cards, such as utilities, healthcare and maintenance. You can choose one category to earn an unlimited 3 points per dollar spent and another category to earn 2 points per dollar spent. 

It’s still relatively hard to find a customizable rewards card since only a small handful of issuers offer them. However, if Bank of America’s new cash back program takes off and becomes popular with consumers, we could see far more customizable cards in the future. 

That would be good news for consumers who value flexibility and want to maximize their rewards earnings. Many cardholders are likely to find that they earn significantly more rewards per year when they choose a card that more closely matches their spending – even if its rewards program seems relatively modest in comparison to flashier cards. 

See related: Is choosing bonus categories the next big trend in credit cards? 

Customizable rewards make it easier to boost your earnings

For cardholders who often struggle to find a card that’s a right fit, customizable rewards cards can potentially be a game changer. 

A number of studies have found a substantial number of cardholders walk around with rewards cards that don’t really match their financial habits and spending. For example, they may have picked a travel card, but only fly a few times a year. 

Or a cardholder may choose a card with rotating bonuses only to find the quarterly bonus categories rarely match their actual purchases.

By choosing your own rewards instead, you can pick a card that matches your lifestyle and habits and not worry about matching your spending to your credit card. 

As long as you continue to use the same card for all your bonus spending, you could be surprised by how much you earn. Using the Bank of America Cash Rewards Credit Card, for example, could potentially net you up to $300 a year in bonus earnings alone. If you use your card for other purchases, you’ll earn even more. 

Cards that don’t come with a spending cap on bonuses, such as the BBVA card, could be even more valuable since the only limit on your earnings is your spending.

You can also change your mind about your bonuses or rotate the categories based on the time of year. Customizable rewards cards typically let you choose a different category per quarter; so you can tailor your rewards based on what you think you’ll spend more money on that quarter, rather than what a lender has chosen for you. That can be a huge help when you’re going through a major life transition, such as having a baby or making over a new home. 

See related: My take on Bank of America’s updated Cash Rewards card


Research has shown many cardholders walk around with rewards cards that don’t really match their financial habits and spending.

Combine with other high-earning rewards cards

One of the most lucrative benefits of a choose-your-own-rewards card, though, is the ability to pair your customizable card with other high-earning rewards card. Although the bonus categories on customizable cards could be subject to change, many of the rewards categories that customers can choose are for relatively obscure categories that aren’t commonly found on other cards. 

As a result, you could wind up earning a substantial amount simply by using a customizable card for a niche purchase category such as utilities or furnishings, and then using a separate set of cards for more common rewards purchases, such as restaurants, travel and groceries. 

Alternatively, you could pair a customizable card with other rewards cards that limit how much you earn on everyday purchases. For example, you could use one card for all your grocery spending and then switch to the other card once you’ve reached your limit.   

Bottom line: Customizable cards offer a valuable opportunity to tailor your rewards to your personal habits and preferences. But before you pick a category, you may want to think carefully about the purchases you make most. 

Choosing a clothing category, for example, may sound fun if you plan to go on a shopping spree. But unless you regularly spend hundreds of dollars a month on clothes, you’ll likely earn more cash back overall by picking a more common rewards category – such as gas or groceries – that you frequently spend a lot of money on.



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