Pretty much the only good thing about credit cards is the reward programs. Some give cash back and some give miles. Here’s a list of what you need to know about these reward programs from those evil companies.
The most direct way to get credit card rewards is to spend. The more you use your card, the better. However, some cards have a limit where the reward percentage drops after a certain dollar amount.
Knowing which card to use for maximum reward will get you 1-2% extra every time you spend. It may not sound like a lot, but it’s free money that you are passing up otherwise.
If you are a no hassle type of guy, consider getting a cash back reward card. These days, you can get as good as 2% cash back for them.
Most people shy away from miles reward cards because of the annual fee. But for those that travel frequently, these cards are great because it gives you so many points for flying.
Credit cards that are tied to a specific store may be great at first but remember that your credit score is tied to these accounts. If the company were to go bankrupt, your card is automatically closed.
Redeeming for merchandise usually means that you are losing out. It may seem cool to get a free TV from your rewards, but you will actually get more money back if you just took the cash.
Reward points tend to expire due to inactivity, so redeem them whenever you get a chance and don’t get into a habit of accumulating a boatload of points.
Applying for a credit card is important to your credit score. That’s why you should think carefully about your score before you go ahead and apply for some reward program.
Don’t spend just because you wanted the reward. Remember that even if it’s a 5% cash back card, you are still paying 95% for the product. If it’s not needed, don’t buy it.
Even though the rewards might be small, it all adds up so don’t ignore the small chunk of change and check out those reward programs.