Maximizing Your Rewards Credit Cards
Saturday, July 4th, 2009 Subscribe To Our Feed
Do you still feel it worthwhile to pay for purchases with your rewards credit cards? It seems issuers of rewards credit cards are taking great pains to offer rewards programs — but the rewards now come with many strings attached. For instance, rewards items seem to be priced higher and your ability to earn points is lower.
But although you may have to jump over more hurdles, there are still ways to profit from rewards credit cards. Below are a few ways to boost your return.
- Assess your spending habits. To maximise the accumulation of rewards points, you need to calculate the amount you spend on your rewards credit cards each month. Your spending habits may not necessarily match with your rewards card. According to a major financial services research group, spending below $1000 a month on your card is not worth your while. To get the most out of rewards credit cards, you should charge at least $12,000 a year on your plastic. If the sums don’t add up for you then it may be that the best credit card for you is actually another card type.
- Choose rewards programs that suit your interests. When you do a credit card comparison, you realise that there are four types of rewards credit cards: frequent flyer rewards, general rewards, cash-back rewards, and instant rewards. If you travel regularly, frequent flyer rewards credit cards may do the trick for you; but there would be no point having them if you don’t fly often. If you’re worried about maximising your budget, you might be better off having cash-back rewards credit cards or similar cards that reward you for purchasing goods you need to buy regularly.
- Cancel rewards cards that are not benefiting you. If you think you can earn more points by having several rewards credit cards, then think again. Chances are you are diffusing your capability to earn more rewards by spreading the spending over so many cards. Or, you may be charging more spending onto rewards credit cards whose advantages are inferior to others. If your wallet is full of credit cards then you may need to compare credit cards and decide which ones should get the axe. Cards with higher interest rates and expensive annual fees may have to go first.
- Be aware of the rules. Make sure you read through the fine print for the rewards program to understand how it works, for example many schemes have expiry dates on the points earned so its a case of use them or lose them. While that used to be the rule, it is now common practice in the industry to set an expiry date on accumulated rewards points. Before you apply do a true comparison and check out the fine print.
- Try to pay your account off in full each month. If your not paying you statement in full the high interest charges will quickly exceed any benefits gained from the rewards. If your trying to earn frequent flyer points then this is especially true. If, however, you cannot pay off the entire balance each month but would still want rewards credit cards to be part of you, you may have to settle for rewards programs offering cash-back or instant rewards.
Rewards credit cards are now on offer from all issuers. The question used to be whether to obtain a rewards credit card or not, but things have changed. It really comes down to the card that will fit your spending and lifestyle best in terms of the rewards on offer but also the costs involved from the interest, fees or any special conditions or restrictions. You can maximize your returns from rewards credit cards with a little planning and thought.
Article by Richard Greenwood Director of compareyourbank.com.au
Technorati Tags: No Tags
Related Tags: No Tags
Possible Related Posts
Credit Card Rewards: Are they worth it?Credit Card Rewards Are Very UsefulEveryone Can Use Credit Card Rewards
