After spending time comparing reward credit cards, you have finally made a choice and submitted your application. Now that you’re approved, it’s time to plan your strategy to enjoy the best benefits. Listed below are tips on how to use your reward credit card and manage your points effectively.
On Collecting Reward Points
Credit card companies reward their cardholders in different ways. Some reward credit cards give 1 point for every dollar spent while others give double points or more, depending on the type of purchase made. Some credit cards are sponsored by specific merchants but only grant reward from selected purchases. Meanwhile, credit cards that are sponsored by banks do give points from general purchases.
Consumers must be smart about using their reward credit cards to make sure that they will not fall in the trap of bad credit. It’s very important to submit payments on time to avoid the interest rate fees and late penalty charges. Take note that credit card with reward programs often charge higher APR than their non-reward counterparts.
To rack up points quickly, use your reward credit card to pay off your monthly utility bills such as electricity, cable, internet, telephone bills, etc. However, see to it that you’ll be able to post your payment on or before the due date to avoid finance charges.
On Redeeming Reward Points
The rules of redemption also vary from one reward credit card to another. Typically, the reward cardholder will have access to the credit card’s reward program website so points can be monitored online. When you’re ready to redeem the points, you may have several options, depending on your reward credit card.
Some issuers allow their reward cardholders to exchange points for cash, gift certificate, merchandise, or available credit. There are airline reward credit cards that give the option to exchange points for hotel stays instead of a free flight. Thus, if you do not want to travel, you can still enjoy your rewards in other ways.
Does your reward credit card have blackout dates? You need to aware of the exact rules of the reward program to avoid forfeiting the point you collected. For example, all your hard-earned points may go to waste if you fail to redeem on time. If you have an airline miles reward credit card, redeeming your free flight may depend on the availability of the seats or carriers. For cash back cardholders, you may only be able to exchange your points for cash after reaching the minimum required value.
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Clearly, you need to study the Terms and Conditions of the reward credit card before signing up that application. If you already have one, review your credit card Agreement so you’ll know what to do and make adjustments if needed. Remember that the only key to benefiting from your credit card rewards is to play by the credit card issuer’s rules.