Rewards from credit card companies have been on the increase now for years, ever since the Discover Card first started offering cash back on credit card purchases. Air travel, cash back on purchases, cheap theater tickets, exotic vacations - they're all available as rewards, and there are reward credit cards that can help you earn them faster.
If you want to take advantage of a credit card that offers rewards, here are a few tips that you should remember:
* Do you maintain a balance on your credit cards? If you aren't in the habit of paying the complete balance due on your cards every month, then you seriously need to consider whether a reward card is the right thing for you. It doesn't take much of an outstanding balance at all for interest to outstrip any rewards that you might gain through credit card rewards. Look instead for a low interest credit card.
* Make sure you understand the currency. The currency of rewards credit cards is points, and they're usually awarded one or two per dollar spent on the card. There are other ways, such as air mileage points, to earn points on your card. Make sure you understand how many points are needed to get to the reward you want and how you can earn those points fastest given the terms of your credit card agreement.
* Check the expiration date on those points! Rewards points that never expire are getting more and more popular, but some cards still offer points that expire after a period of time. Depending upon how fast you earn points, it may take you some time to earn points for high-end rewards, so as you shop for a rewards card look at their policy on point expiration. Try to find a card that offers points that never expire.
* Make sure you know which purchases optimize your points. Cards vary on the types of purchases that can lead to award points. Some American Express cards offer double points on purchases of groceries and gasoline. Read the fine print in your agreement and make sure you understand how to maximize your points - you could reel in receipt of a reward by months.
* Learn to pay your bills with your credit card. This is an easy way to rack up points. Most power, cable, gas, oil, grocery and phone bills can be paid by credit card these days. Get into the habit of paying those bills by credit card and then immediately transferring the amount of the payment from your checking account to your credit card.
* Get the best sign-up bonus. Most rewards cards offer a sign-up bonus of points. As you 're shopping for a rewards card find one that offers a good bonus for just applying and being accepted. Often the bonus alone can get you half-way to a high-point award. Once you achieve the award you want you can shop for another rewards card, sign up, close your old account and reap the benefits of another sing-up bonus!
I have a big family - grocery bills alone can amount to $200 per week, and I pay for everything with a rewards card. Using the above techniques I have been able to cash in on free round trip airfare in as little as two or three months. That's a huge savings! It has allowed me to take trips, visit friends and go to events that I probably wouldn't have gone to if I had to purchase airfare, and that fact is more valuable than the cash savings! Try it - it'll work for you too.
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