Choosing And Using A Rewards Credit Card
Credit cards that offer you a bonus for using them to make your purchases have become increasingly popular. Many people sign up for them but fail to get the most from the program. There are some things you can do to optimize your rewards credit card.
The first thing you should do is to choose your rewards card or cards wisely. Look at what the card offers and ask yourself if this is something you can use. A card that offers airline miles may be useless to you if your spouse refuses to set foot on an airplane. If you live in a large city and always take a taxi, free gasoline probably does not tempt you.
Look at your purchasing habits, as well. If bonuses are earned when you purchase gasoline, you will not earn much if you do not drive a car. And if your at-home dining is limited to take out foods, grocery store purchases are going to contribute little to your points.
Examine the point structure to see how quickly they can be earned. This should also include your spending habits. For instance, a card may offer an attractive number of points for stays at select hotel chains. This might work well if you are constantly on the road for business. But if you sleep at home 364 nights a year, it would take a lifetime to earn enough points to matter, which also means you should look at how quickly the points expire. The most desirable offers have points that do not expire.
It pays to choose a rewards card carefully. With so many to offers available, there is no need to accept any card just because there is some type of reward attached. Choose only those you can truly utilize. And watch out for annual fees that can offset any bonuses earned. A card that will pay you 1% cash back on a maximum of $7,500 worth of purchases, but charges an annual fee of $75, gains you nothing. One that offers no reward, but charges no fee, is just as good a deal.
But what if you cannot decide between two dramatically different rewards? You might want to use both. For instance, one with airline miles that never expire can be used to save for a future vacation. In the meantime, one that pays cash back for typical daily living expenses can make tight budgets a little more bearable.
Use a rewards credit card with the same common sense you would apply to any credit card. Do not use it merely to earn reward points. You will want to make more than the minimum due each month, so do not overuse it. Look at all terms of the credit card offer, such as the interest charged and grace period. But with prudent selection and use, a rewards card can certainly increase your buying power.
I think this article will also be of interest to you:
Related Reading:
