A credit card can be a badge of financial freedom, but it can also be an anchor if you aren’t responsible. This is especially the case with rewards credit cards – or cards that offer bonuses and points for making certain purchases. Most of these companies offer a reward to encourage spending, which seems dubious, but if you know the rules and if you pay on time, it can be a win/win situation. One of the best ways to level the playing field is to learn some tips and tricks on how to maximize credit card rewards so that they work out in your favor. Here are five tips for maximizing credit card rewards points.
- Choose the right credit card for your lifestyle. In some instances, a rewards credit card may be completely useless if you don’t make a lot of specific purchases. However, if your lifestyle includes a lot of going out to restaurants, you may want to sign up for a card that gives you points for each meal. The same goes if you are a frequent flyer – you may want to sign up for a card that offers miles.
- Read the fine print. A lot of credit card companies have very complicated rules and regulations regarding credit card rewards. For instance, you may need to meet a certain purchase limit before you are eligible. Also, you may not be able to redeem your rewards during a certain time of the year. So, be sure to not waste your credit card points and bonuses – simply read the fine print to know when you are eligible and when you can cash in.
- Use the card wisely. It is also important to use the credit card only when it is applicable. For instance, if you have a frequent flyer card, you want to use your credit card to make flight purchases. If you use another card for that purpose, you will not reap the rewards. The same goes if you are at a restaurant. You don’t want to pay cash, because if you put the meal on your rewards card, it will most likely garner you points.
- Make sure that you can see how many points and bonuses you have. Typically, when you sign up for a rewards card, you can use a website interface to see your balance, outstanding balance and other info. There is also a good chance that you will be able to see how many points you have or if you are eligible to redeem your bonuses. Without this interface, it will be hard to know when you should cash in.
- Always pay your bill on time. If you don’t pay your bill on time, your interest fees may be higher and you may be hit with a penalty. Most reward cards have a slightly higher interest rate, so being tardy on your bill could result in more financial burden. In the end, you want to be careful about how much you spend on your rewards card, because you don’t want to end up with credit card debt.
