Credit card rewards have become a major benefit to consumers who use their cards responsibly. If you pay off your balance in full each month, you can actually make money by paying for goods and services with your credit card.
It is important to know that credit card issuers can make it a bit challenging to redeem your rewards. Thus, in order to get the maximum value from your credit card reward program, you will need to know the rules and take advantage of every opportunity offered. You will also want to pick the best card for your spending and lifestyle. You do not want to make purchases you don’t need just to earn rewards. Pick a credit card that has a rewards program that fits your current spending habits.
How Often Will You Use Your Card?
If you only spend about $1,500 annually on a credit card, it is pointless to get a credit card that only offers rewards after you’ve spent $5,000. There are likely better options available that will help you maximize your rewards. It is important not to spend money you normally would not just to earn credit card rewards, so you should factor in your budget when deciding which credit card rewards program to choose. For example, if you plan on spending a lot on travel, you will want to consider a credit card with good travel rewards to maximize your benefits.
What Categories will You Spend the Most On?
Many credit cards have revolving spending categories, which means you can earn additional rewards when you make a purchase within a certain category. With revolving rewards, though, the bonus categories change periodically–usually every quarter. With these types of cards, you will need to adjust your spending every three months to earn enhanced rewards. You will want to make sure you will purchase goods within each revolving category, or the card may not be worth it. For example, if you are given bonus points for restaurant spending, but you do not eat out, you will be missing out on potential rewards. Before deciding on a card, make sure it offers enhanced rewards in categories that match your typical purchases.
Understand the Rules
Credit card issuers offer many different rewards programs. The programs can be easy or work with complex rotating categories that require you to register every quarter. There may also be caps on the amount of rewards you can earn, particularly with cash back rewards. As the cardholder, you are responsible for knowing the rules, so you do not lose out on money or other benefits. Thus, study the terms and conditions before you use your card, so you know about any spending thresholds or blackout dates for travel rewards. Extra research may cost you some time, but it will save you money in the long run.
Use Rewards Before They Expire
Do not let your rewards expire! While this point could be listed under “Understand the Rules,” it is so important, it earns it’s own bullet point. You need to know when your points expire and whether there are any restrictions on them. After all, what is the point of the rewards if you cannot actually use them? Rewards may expire earlier than you think, so you will want to contact your credit card company ASAP if you have any questions about the program. It bears repeating–make sure you know the terms and conditions of your rewards program before you make purchases.
Avoid Late Fees
While some believe missing a credit card payment will not affect their bonus points, they are wrong. Some rewards programs will revoke the points you have earned in a particular month if you do not make your payment on time. It would be a shame to make a major purchase and then lose out on the bonus points due to a late payment. Late fees do not only affect rewards, they can also affect your credit score and bank balance. Many credit card companies will also increase your interest rate if you miss a payment. Thus, it is important to always make your payments on time.
There are many ways to get the most from a credit card rewards program, but the most important thing you can do is choose the right card. You will want a credit card that fits your lifestyle and rewards you for your current spending patterns. You can find cards that reward you for purchasing flights, hotels, gas or groceries, so find the one that fits you best. Making purchases just to get rewards is an excellent way to end up in debt, which is something everyone wants to avoid.
Once you have the right card, make sure you understand the rules of your rewards program. When you fully understand the program, you can maximize your rewards. But do not let your rewards expire!