Use a rewards credit card to make the most of your spending.
10 Tips to Get the Most Rewards from a Credit Card
To get the most from a rewards card, use the following 10 tips:
Earn rewards where you spend the most money. Choose a card that will earn rewards at the stores where you shop or for the type of products that you buy frequently, like groceries, gas, or airline tickets.
Earn rewards for items that you want or need. Cash rewards give you the most flexibility, however, some rewards cards allow you to earn points for a Disney vacation, hotel stays, discount retailers, or concerts, for instance.
Get a card with no annual fee and the lowest interest rate possible. This will increase the value of your rewards and cost you less if you do have to carry a balance from month to month (but remember that’s not what I recommend). However, paying an annual fee can make sense if you’re a big spender and will earn more than enough rewards to offset the cost.
Stay alert to rewards expiration dates. If you earn points that have to be redeemed by a certain date, be sure to put a reminder on your calendar so you don’t lose them.
Limit the number of rewards cards you have. If you earn rewards on just one or two cards it’ll be easier to keep up with their benefits so you can maximize them.
Read the rewards terms carefully before you apply for a card. There may be restrictions such as limitations on purchase categories, tiered rewards, caps on the amount of rewards, or time limits on when you can earn rewards.
Consider a card’s additional free benefits. Extra offers like travel insurance, extended product warranties, and other buyer protections may make one card a better deal for you than another.
Take advantage of bonus programs. Some rewards cards offer discounts or extra points or travel miles when you shop with their merchant partners or through their online shopping malls. Always review the partner offers before you make a big purchase so you don’t miss any discount opportunities.
Stay up-to-date on program offers. Sign up to receive program e-mail notifications and limited-time offers. Getting the most out of your rewards program will mean spending a little time managing it—but it’s well worth it.
Find the price of the reward you want. Redeeming points for merchandise or airline tickets may not be the most economical way to make those purchases. Be mindful of the real value of what you’re getting and don’t overpay for something just because you’re spending points (unless they’re about to expire, that is!).
A final quick and dirty tip is that rewards cards may not have the lowest interest rates. So if you carry a balance from month-to-month, use a low interest card instead. Paying an interest rate that’s higher-than-necessary would wipe out the value of your rewards and extend the time it’ll take you to pay off your balance.
Lastly, a new banking regulation is forcing banks to ask you whether or not you want to opt in for overdraft protection. Get my take on overdraft coverage, and whether or not you should risk the hefty fees, in my Quick Tip on overdraft coverage.
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House Call Doctor
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