Credit card rewards have been increasing and morphing in hundreds of different directions ever since the advent of the Cash Back Credit Card from Discover. Whether it is air travel you are after or cash back on purchases, exotic vacations or cheap theater tickets, there is a reward credit card that can help you get what you want 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 pay the entire balance on your credit card every month? If you don’t, then a reward card might not be right for you. If you maintain a balance on your credit card the interest that you pay each month may exceed the value of any rewards you might accrue. You should either get into the habit of paying the entire balance every month, or look instead for a low interest credit card to save money.
* Make sure you know the currency. In this case the currency that you’re dealing in is mileage points or points awarded for each dollar of credit card purchases. The number of points required for a reward vary from card to card, so make sure you shop for the card that will get you to the reward that you want the fastest.
* Check the expiration date. More and more airlines are offering points that do not expire. Credit card vendors, however, can have a use-it or lose-it policy. Depending on your spending habits it may take you a long time to qualify for the awards that you are interested in (whether they’re airline tickets or not) so look for cards that offer points that don’t expire.
* Which types of purchases optimize the number of points you receive? Rewards cards can vary the types of purchases that lead to points (or double points). Some American Express cards offer double points on gasoline purchases. Read your credit card agreement and be sure to understand how you can maximize your points. Knowing which purchases count most toward rewards can get you to a required point level faster.
* Pay household bills with your credit card. This one is huge for me. I pay for gasoline, groceries, electricity, heating oil, cable TV and water all with my credit card. If you get used to paying as many bills as possible with your credit card (and then transferring the money from your checking account to your credit card) bill payment gets easier, the credit card balance won’t get away from you, and you’ll earn points faster than ever.
* Make sure you get a good sign-up bonus. Most rewards credit cards offer bonus points just for signing up and getting accepted. Usually the points are available after you make any purchase with the new card. Make sure you choose a rewards card that offers the most up-front points - you can often get close you your first reward just in bonus points!
My family grocery bills approach $200 per week (I have a big family!), and it all gets put onto a rewards card. If you’re smart and willing to work at it you can use the tips above to accelerate your rewards. Using the tips outlined above I’ve been able to get round trip airfare in as little as two months time. With free airfare I’ve been able to take trips I otherwise wouldn’t have taken - and for me that’s worth more than the money! Try it - it can work for you too.
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