While credit card debt remains a significant challenge in the United States, Americans are nonetheless quite fond of their rewards cards. In fact, a recent LendingTree survey found that about 87% of credit card holders carry at least one rewards card.
Despite the concerns many consumers have about credit card debt, it’s easy to see why so many people still sign up for them. The various benefits they offer, including cash back on purchases and free travel, remain popular.
Ironically, many Americans focus on collecting the rewards but fail to redeem them before the points expire.
Here are four great tips to ensure you get the most out of your credit card reward points:
1. Go for the Cash
One of the best ways to ensure your reward points don’t go to waste is to make them as liquid as possible. And nothing converts to cash better than, well, cash. Unlike other types of reward points, which may offer discounted airfare or consumer items upon redemption, cash-back rewards save you money by essentially refunding a percentage of your purchases – typically 2%.
If you have a cash-back rewards card, you can use your rewards to buy additional items or services. In many cases, your credit card company can transfer the earned cash to another account or mail you a check. You can also apply the cashback to your credit card account to pay down next month’s balance.
The tremendous flexibility of cash-back rewards has made these among the most popular types of credit cards. After all, who doesn’t want to save money every time they spend with the card?
2. Choose Rewards You Will Actually Use
Having a rewards card won’t do you any good if you never have an opportunity or desire to use the benefits. If you want to get the most out of your credit card rewards program, ensure that it aligns with your activities and interests.
For example, if you’re a frequent traveler, you could make the most of a card linked with an airline or hotel you frequently use.
Having a card aligned with your interests will help ensure that you use the points before they expire.
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3. Use Them Frequently, but Be Careful
To reap the most benefits from whatever type of rewards card you have, you should use it as often as possible. Doing so enables you to maximize the rewards you earn, which you can then redeem for something you actually want.
You will want to accumulate as many points as possible, but it shouldn’t be at the expense of your financial health. It is important to ensure that you use your card responsibly and have a plan to pay off your balance each month.
It’s obviously not good to reap the benefits of a credit card rewards program if you are just going to end up heavily in debt. Racking up interest charges that outweigh the rewards defeats the whole purpose.
4. Keep Track of Your Rewards Program and Points
LendingTree found that about 70% of rewards credit cardholders are not taking advantage of the perks included such as cash back, points, or miles. While most of these benefits will expire if left untouched, some companies have done away with expiration dates altogether.
To ensure you put those reward points to good use, take the time to track them. If possible, sign up for online banking and link your card. This way, you can know how many points you have and gauge when they expire. As a bonus, you can also monitor your credit card balance and make convenient online payments.
You should always monitor the terms and conditions for your rewards points too, especially when you are required to sign updated terms. The more aware you are of your rewards program and points, the better opportunity you’ll have to make the most of them.
Get the Most Out of Your Rewards
To reap the maximum benefits from your rewards card, follow the tips offered here. However, ensure that in your pursuit of additional rewards points, you don’t allow your credit card debt to get out of control.
Strive to fully pay your rewards cards off each month or keep the balances on them manageable.
No credit card rewards program is worth the burden of a high level of debt and snowballing interest charges. But when used properly, you can get more out of every purchase.
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