Choosing And Using A Rewards Credit Card

How To Optimize Your 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.

Optimizing your benefit begins with the choice of a rewards card. Before you accept one, you should look at the bonus it is offering. Is this actually something you will use? For example, you might like to accumulate airline miles for a romantic vacation. But if your spouse refuses to fly, it is of little use to you. Likewise, city dwellers who always rely on subways and taxis gain little from cards that pay bonuses in the form of free gasoline.

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.

Think about how quickly you can earn the points. This involves not only the terms of the card but also your buying habits. If, for example, a card offers 100 points for every night you stay at a certain hotel chain, it might be a good plan for someone who travels extensively on business. Someone who stays at a hotel once or twice a year will spend the rest of his life earning points, which brings up another area to consider. How quickly do the points expire? The best offers feature points that never 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.

If you are torn between two rewards, you can always use two different cards. Perhaps you can choose one that offers airline miles that do not expire to accumulate points for a vacation down the road. You can use this card when traveling on business or making major purchases to make the miles add up faster. Then you might choose a card that pays a nice percentage back on grocery store purchases for everyday use.

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.

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