Nowadays, the issue isn’t whether you should get a credit card with reward points, but whether you are strategically using your points and the cards that come with them. To remain competitive, plenty of banks and credit card companies offer accompanying rewards for customers who use their cards. That means you can use credit cards for rewards.
Rewards can come in the form of cash, airline miles, gift cards, products, and much more. While the rewards are incentive for you to use your credit card, you could be spending more than the rewards are worth. I’m sharing 5 smart ways to use your credit cards and get the best rewards for you!
#1: Don’t Carry a Balance
Unless you have a 0% interest promotion, it’s not worth carrying a balance on your credit card, regardless of the rewards. In the end, you’ll likely be paying more in interest than you would had you bought the reward outright. The key to using a credit card for the rewards is to use the card for all of your purchases, then pay it off in full each month.
This strategy is most effective when you have a solid budget in place and you know what you can afford to spend on your purchases throughout the month. Without this knowledge, you run the risk of overspending and carrying a balance as a result.
#2: Align Your Card to Rewards You Will Actually Use
If you don’t travel often, it’s not wise to use a credit card that only offers airline miles. If you drive quite a bit for work, you should pay for gas with a credit card that gives you a discount on gas or gives you cash back when you purchase gas. The point is, pick a credit card whose rewards align with your interests. This will allow you to get the most benefit from your card and get rewards you will actually use.
#3: Keep Tabs on Your Reward’s Expiration Date
There’s nothing worse than using your credit card the right way (using it for purchases then paying it off in full), only to forget when your reward points expire and miss the chance to use them!
“Typical reward expiration is 12 to 18 months, with some going out as long as 24 months,” says Roger Brooks of ZipLine Payments. “Sometimes you can buy your points back after they expire, but it’s best to use them before the expiration date.”
#4: Be Knowledgeable of Additional Card Benefits
Most credit cards come with a variety of additional benefits, outside of rewards. Some credit cards offer rental insurance or baggage protection if you’re travelling. Other cards offer discounts at stores, hotels, or companies that partner with them.
Most credit cards come with some form of fraud protection – hopefully you will never need it! It can save you money (and hassle) if you are familiar with all of the benefits available to you with your credit card.
#5: Cash Never Fails
If you’re simply unsure of the type of rewards will be best for you, cash never fails! According to creditcards.com who completed a survey in 2015 about reward points, “cash-back rewards are nearly three times more popular than airline rewards or hotel rewards programs.”
The great thing about cash reward cards is that you can have the cash applied as a statement balance, or directly deposited into your bank account. Cash is one thing anyone can use, so consider a cash back credit card if you’re on the fence!
You certainly don’t have to avoid credit cards altogether, in fact, if you’re smart with your credit cards, you can reap in some major perks. If you get the chance, read Confessions of a Credit Junkie.
Author Beverly Harzog describes a pretty awesome method for taking advantage of credit card rewards. What credit card rewards do you currently have? Do you often take advantage of your points? Share your thoughts and experiences by leaving a comment below!