Ever since the Discover Credit Card first started offering cash back on purchases credit card issuers have been beating each other’s brains out to get your business. Credit card rewards now come in all shapes and sizes, and some credit cards can get you to those rewards faster than others. Whether it’s air fare, theater tickets or anything else you’re after, there is probably a reward credit card available that can help you get it free.
If you want to take advantage of a credit card that offers rewards, here are a few tips that you should remember:
* Don’t keep a balance on your credit card. If you do, you’ll end up paying more in interest to the credit card company than any reward might be worth. Get in the habit of paying your bill off completely and on time every month – or else shop for a low interest credit card instead of a rewards 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 to see if points expire. While airlines have begun to offer their customers points that never expire, some credit cards still give you points that are use-it or lose-it. It may take you a long time to qualify for some of the higher point valued awards, so look for a card that offers points that don’t 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.
* 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.
