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Plastic money is a popular mode of payment today. It offers several advantages – safety, building a credit history, and allowing you time for making payments. But did you know how much you can get out of reward points on your credit card? Credit card companies offer you reward points to encourage you to use your credit cards more frequently. These reward points are based on the usage of the credit card. The more you use your credit card, the more reward points you earn! Different companies have different types of rewards - cash back rewards, frequent- flyer rewards, frequent shopper rewards, and so on. You must use the reward points to your advantage. This is how you can do just that: -
Choose the appropriate reward program for you. If you travel frequently, then the credit cards that offer rewards to frequent travelers would be beneficial for you.
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Make sure you use the card every time you make the purchases for which you earn rewards. So if a particular credit card gives you ‘free air miles’ on travel, be sure to purchase all your air tickets on this credit card only.
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Analyze the annual fee. Some credit card companies charge an annual fee to enroll you for the reward programs. Do a quick cost-benefit analysis. Make sure that your rewards outweigh your annual cost.
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Understand that credit card reward points are ancillary benefits. Only if you can pay the balance when it becomes before the due date, should you use the card. The interest rates are high on credit cards in case of failure to make the payments or paying only minimum balances. Don’t be ‘penny wise and pound foolish’ here.
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Study the rewards offer completely and make sure you have understood it. For example, if your cash back rewards says ‘rewards in the form of cash back up to 10%’, you should know which purchases will give you a cash back of 10% and which purchases will give you lower or no cash back. Also keep track of the date when the offer closes and last date of redeeming the points.
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Maximize your credit card usage by making your regular payments like electricity and phone bills on it. Don’t wait for big purchases to use your credit card. Do you use the reward points on your credit card? How do you maximize the rewards earned? Do you think rewards are just a gimmick to get you to spend money on things you don’t actually need?
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