Many credit cards have a rewards program linked to it. These provide the accountholder to earn everything from airlines miles and cash to points that can be redeemed for gift cards and merchandise for most or all purchases made with the card. While these programs are highly common, many people have heard that the accounts may end up costing them more money in the form of various fees than they will ever generate for you in cash and merchandise. The fact is, however, that you can use your account strategically to maximum the benefits that it can provide to you.
Find the Best Rewards Program
As a first step, take time to review different rewards programs available from other companies, and compare those programs against the one you are currently using. Everything from how points are accrued and if they roll over from year to year to the fees associated with the account and the type of gifts or merchandise you can earn should be analyzed. Ideally, you want to find a credit card that offers the maximum incentives with minimal costs. A program that offers the type of merchandise that you find most useful will benefit you as well. For example, if you rarely travel, using an account with an airline’s miles program may not be the best option.
Understand the Rules
You should also take time to read the fine print associated with your rewards program. Each credit card has different rules in place, and you may wind up losing points that you have earned or paying extra fees on your account if you don’t understand the rules. Pay attention to factors like how often the points can be redeemed, if they roll over from year to year and other factors. Also, pay attention to how points are accumulated. For example, some programs provide you with double or triple points earned when you fill up your gas tank at certain gas stations or charge your groceries to the card.
Make Strategic Purchases
Once you have a credit card with a great rewards program in your wallet to pull out as needed and you clearly understand the rules associated with the account, you can start putting it to use. However, avoid rushing out and making purchases haphazardly. If you want to maximum the benefits of the program, you will need to make strategic purchases with it. Some people get into trouble with these programs because they make more charges with the account than they can pay off at the end of the month. When this happens, interest charges can skyrocket, and the account may end up costing you far more than you will ever get back in the form of rewards. Only make purchases that you had intended to make without the card, and avoiding making purchases simply to accrue extra points.
Look for Special Offers
You should keep an eye on the list of merchandise, gift cards and other items that you can redeem your points for. In some cases, you may find special offers available on merchandise that the company is trying to clear out. These special offers can be used to stretch the value of your points. However, while some offers may seem too good to resist, avoid redeeming your points for merchandise or other items that you really don’t need. To maximize the benefits of your account, you want to use it to obtain merchandise or rewards that will truly be useful to you in some way.
Use One Account
As a final note, in most cases, it is best to use only one account rather than to try to maximize points with multiple credit cards. When you use a single card for your purchases, you will accrue points more quickly. However, there is a caveat to this. Some rewards programs have an upper limit on points that can be earned during a certain period of time. If you regularly meet or exceed this upper limit, you may benefit from using a second card with a rewards program.
The fact is that you can earn a significant amount of cash back or other types of fabulous merchandise by maximizing the benefits that your rewards program offers. As you put these tips into practice, keep an eye on the fees related to the card as well as your account balance. If you are serious about maximizing the benefit of the account, you do want to pay your account balance off in full each month to avoid racking up interest charges!
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This article was written Wayne Lee, a personal finance advisor and part-time blogger. Please visit www.icreditcardoffers.com to learn more about his latest work.