Many people associate credit cards with debt and overspending. While that can generally be true, if used wisely, credit cards can be a tool for good. They can help build credit and if you have a rewards credit card you can even leverage it to lower your spending. You can use it strategically toward line items in your budget and maximize your rewards. If you have credit card rewards you want to use and want to lower your spending, here are six ways to use credit card points to lower your spending. 

1. Get Cashback 

If you have a rewards credit card that offers cashback, you can use that extra bonus of cash to boost your income or pay down expenses. Some cards are straight cashback, while others may have points turned into miles or cashback. 

You can find some of the best cashback credit cards that offer the most return to help you offset your costs. The key is to not spend more than you normally would (aka stick to a budget) and use the cashback to save for an important goal, like a vacation when it’s safe to travel again. 

2. Buy Grocery Gift Cards 

Some credit cards have versatile redemptions options that allow you to buy gift cards. In some cases, you may be able to purchase gift cards for grocery stores. For example, my credit card, the Chase Sapphire Preferred, allows me to purchase a Safeway or Kroger gift card. 

Being able to buy grocery gift cards with credit card points can help you lower your spending.

Grocery bills tend to be one of our largest expenses aside from rent/mortgage and transportation. So if possible, use your credit card points toward grocery gift cards and save money on one of your most expensive line items in your budget. 

3. Buy Store Gift Cards 

I’ll admit, I like going to Starbucks to get my caffeine fix but I don’t like spending my own money. When I want to still support that line item in my budget without spending my own money, I’ll covert credit card points into a Starbucks gift card.

That way, I can get my Grande Cappuccino without spending any “extra” money. I’ve also done this with Amazon gift cards as well. I have a Chase Sapphire Preferred credit card that I can use to get gift cards to stores, statement credit, or travel. 

If there is a store or place you like to go to and spend your own money, see if you can get a gift card for that same place using your credit card points. That way you’re utilizing your credit card rewards to lower your expenses while you still enjoy the perks at no extra cost. 

4. Get Statement Credit or Pay Yourself Back

You may be able to turn your credit card rewards into a statement credit, ultimately lowering your credit card bill. The Chase Sapphire Preferred card that I have has a unique “Pay Yourself Back” program where you can use your points toward specific purchases.

Being able to use credit card rewards to offset your expenses is a smart way to lower your spending. Right now, many people aren’t traveling due to the pandemic, so rerouting your rewards to help boost your bottom line is a good idea. 

5. Use it for Necessary Travel 

Many people aren’t traveling right now and that’s the smart and safe thing to do. But in certain cases, you may have to travel if a family member is ill or there is a special once-in-a-lifetime event.

In those cases, you can use your credit card points for travel so you don’t have to put so much money upfront for the trip. 

Let’s face it, traveling is expensive. But using credit card rewards toward flights or hotels can help lower your costs significantly.

Be sure to do your research to see how you can get the most out of your points or miles. You may be able to get more bang for your buck by transferring to a different airline. The point is to do research to make sure you’re getting the most out of it and can score the best deal. 

6. Pay Down Debt 

If you have a cashback credit card, you can consider putting that extra cash you earn as a reward toward your debt. I got my first credit card at 28 to build my credit while I was paying down my student loans. I got a Capital One cashback credit card and ended up using any extra cash I earned toward my student loans.

It was a great way to put more money toward my debt repayment and pay down interest and principal. Paying off debt is all about paying more than the minimum on your debt. One way to do that is to funnel your cashback toward your debt. Just make sure you don’t add to any debt by not paying off your credit card! 

Credit Card Rewards Summary  

When used responsibly, taking credit card rewards and putting them toward items already in your budget can be a great way to lower your expenses. But a word of warning.

Make sure you’re not inadvertently spending more because of the potential to “earn more rewards.” You don’t want to overspend or get yourself in debt or add to your current debt because of a credit card.

That’s why these strategies should be reserved for people who pay off their credit card balance in full each month and make sure to pay it off on time. If you have tons of credit card debt, this strategy is not for you at this time. But if you can manage your spending and budget and pay off your credit card, you can hack your rewards to help your overall budget and spend less. 


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