Credit card with reward programs are supposed to give incentives and savings for its cardholders. In reality however, many people who reward credit cards find themselves struggling with high rates and expensive fees, barely enjoying any reward.
How can you get the most benefit from your reward credit card? Check out the following tips:
1. Do not carry a balance from month to month. If you’re going to carry a balance each month, you might as well opt for a non-rewards credit card with low rate. This is because rewards credit card usually have much higher APR than non-rewards cards. If you’re going to submit only the minimum due payment, you could end up paying more because of the interest rates. Obviously, not a smart way to get rewarded.
2. “Up to” is always conditional. Remember that when you see the term “Up To”, it is always subject to certain conditions. For example, if a reward credit card offers “up to” 5% rebates, you need to know exactly what you need to do to earn the maximum value of rebates. In some cases, you might only get the chance to earn the maximum value if you use your card to purchase high-end shops.
3. Plan your purchases ahead. Before going to the mall to shop with your reward credit card, make a list of what you plan to charge to your account. This way, you can seriously consider if you really need to buy an item and avoid splurges or unplanned spending.
4. Stick by the limit. Be careful not to exceed or maximize your credit line as doing not only increases the risk of bad debt, it can also badly affect your credit score. Ideally, credit card charges should not exceed 30% of the available limit.
5. Redeem your points before they expire. Some reward credit card issuers impose blackout dates which mean if you don’t get to redeem your points on time, you end up losing all the points you’ve collected. It’s a good idea to look for a credit card with no blackout dates but if yours have one, then you need to be aware of it and exchange your points before they expire.
6. Avoid penalty charges. Reward credit cards often have more strict policies and if you don’t abide by the rules, the fees can really hurt you. This is particularly true when it comes to payment terms. If you’re late in submitting your payment or if you exceed your limit, the penalty fee can cost you big.
Ann Wilson is the head writer of Reward Credit Card Site. This resource provides consumers with valuable reviews and information on the best credit card reward programs. Its main objective is to help people to take advantage of reward credit cards and start earning reward points. Copyright © 2008
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