Credit Card Rewards and How to Use Them

By • Oct 23rd, 2011 • Category: Credit Cards, Miscellaneous

4681527609 00c5920062 m Credit Card Rewards and How to Use ThemCredit card rewards are one of the most common ways that card companies entice customers to their brand. In exchange for the negatives of paying annual fees, rewards cards offer frequent flier miles, cash back on certain purchases and other rewards that customers find attractive.

One of the stipulations to reap the rewards, however, is knowing how to use them.

Pay Your Cards Off Each Month

If your credit card company offers you rewards, the best way to reap the benefits of these rewards is to pay off your card’s balance at the end of each month. Carrying a balance from month to month adds interest. If you accrue too much interest, you will be paying more in interest payments than what you would reap from the credit card rewards.

Know the Guidelines

Does your rewards card only reward you for using it at certain stores? Are you using a gas rewards card that only gives cash back on purchases at actual gas stations? Do you have to use your card a certain number of times each month in order to qualify for the rewards? These are all questions you should be able to answer when using a credit card rewards program. Read the fine print because many rewards programs are very specific about the guidelines and regulations that you must follow to get any benefits.

Choose Your Rewards Program Wisely

Don’t just sign up for any credit card rewards program that comes along. Evaluate your needs and if you will actually receive any benefits from the card before signing up. Opening too many new credit accounts can look bad on your credit report so it is important to keep track of your applications and only apply for the cards that will benefit you. For instance, if you never go clothes shopping, applying for a rewards card for a clothing store is not the best idea.

On the other hand, if you travel a lot, signing up for a rewards card that offers frequent flier miles may be a great way to save money on airfare or even get free airline tickets to a destination of your choice.

Know the Limits

Many credit card rewards programs have limits attached to them. For instance, if you use your gas card because you get a percentage of the cash back, know how much the limit is each month. Some gas cards only give cash back on monthly purchases up to $300.

If you use your gas card for more than $300 each month, you will not receive cash back on anything over that amount. If you have other rewards cards in your wallet, you could be using these once you reach the limit on one card so you do not waste any rewards.

Credit card rewards programs are ideal ways to save money and get things in exchange for using a particular card. However, it is important to choose the ones that are right for you and know the guidelines of each one to maximize your benefits.

Annie is a finance specialist for Dobovo, the free money-saving app for frugal travellers. Check our site for affordable apartments in Kiev on your next trip to Eastern Europe!

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