Five Steps to Making the Most of Your Rewards Card
1. Find exactly what you want in a rewards program.
Visa, MasterCard, American Express, all hosted by Citibank, Chase, Bank of America, and those are just a few of the cards and companies out there sprinkling the masses with colorful and powerful pieces of plastic. Some of these cards come with rewards, which make them even more enticing. There is nothing wrong with a reward card – if you are going to use a credit card you might as well get something out of it, right? Before getting too excited, think about the sort of reward you want. You may have to do a bit of research to find out what is available, but generally there are points cards where you can redeem points for gift cards and other items, airmiles cards that can get you to the Bahamas free of charge, and cash back programs which return a small piece of every dollar you spend. Think about which is most practical and beneficial to you and then start comparing.
2. Read that fine print!
Reading the fine print cannot be stressed enough. No one ever wants to read the fine print. It’s tiny. It’s full of legal jargon. It’s too much of a hassle. No matter what excuse you come up with to avoid fine print, doing so can only land you in a position you never wanted to be in. Fees. High interest rates. Restrictions. A low credit limit. The fine print will tell you everything you wanted to know, and with knowledge at our fingertips these days, you can look up any questions you might have on the internet. How does APR work? What is the purpose of an annual fee? Knowing the fine print for your rewards card can ensure you that you know how many points, airmiles, or what percentage cash back you will get for every $1 spent, and that is very important to know.
3. Make sure every dollar is well spent.
Once you have found a rewards program that offers a point for every penny spent or a large percentage cash back for every $1 spent or 2 miles for every $1 spent, spend wisely. If you are smart, you could put almost anything you would buy normally on your credit card and still be able to pay it back when your bill comes. Avoid crazy splurging in order to boost your rewards because this sort of behavior can backfire. If you have a balance stuck on your card, you might end up paying extra in finance charges, which could negate all types of rewards. Why? Depending upon the amount you have to pay, you could have easily used that money for what you plan on getting – a gift card, extra cash back, etc. Buy what you need, indulge only slightly, and make sure your balance is 0.
4. Keep it together.
Think you can get more rewards by opening up multiple rewards cards? Think again. Opening too many cards can damage your credit history because it looks irresponsible. Also, it is much better to keep all your money together steadily earning points or miles instead of splitting up purchases to different cards. Rewards will build more slowly so that by the time you can get that Best Buy gift card, you already went ahead and bought that new TV. Use one card and rewards will come to you much quicker.
5. Be practical when redeeming.
People who get too eager to spend their points don’t get much in return. Why dive in and get a $10 Starbucks card when you can wait just a few weeks more and be able to get a $25 Barnes & Noble card? Don’t settle for something paltry when there is something really good on the list that you can really use. You’ve come this far to get the card you wanted – now you have to make sure to get the reward you want too.