How to Use Credit Card Rewards Points
Go for a smart signup bonus., Review your rewards points system., Redeem your rewards points before they expire., Check your rewards points system often., Cancel if necessary.
Step-by-Step Guide
-
Step 1: Go for a smart signup bonus.
There are hundreds of credit cards you could pick.
This means that they are all competing with each other to get you to sign.
Look at the different sign-up bonuses to see who will fix you up with the most rewards possibilities up front.
For example, a good signup bonuses might give you high points or airline miles in the first several months for relatively little money spent.
If the cash equivalent of what they are offering you is at least 10% of the amount you spent, it’s a pretty good deal.Stay away from cards that offer you a tempting sum of rewards points up front, but then pull the rug out from under you.
This is especially dangerous if the sign-up bonus peters out long before your ability to cancel the card without incurring a hefty fee. -
Step 2: Review your rewards points system.
This process will help you determine which purchases will earn you the highest number of rewards points.
If you have a steady income, you may want to open a few different cards for different spending.
You will simply have more companies to pay the same amount of money at the end of the month.
For example, if gas station purchases offer higher rewards than purchases you make at a retail store, charge all your gas station purchases to that credit card.
Find another credit card that rewards you for retail store purchases. , Rewards points are an artificial currency created by your credit card company.
They aren’t susceptible to the same laws of nature of real money.
This means your credit card company can set and expiration date, and your rewards vanish in thin air.
Know your expiration dates, and get whatever you can if you find yourself approaching one.
Using your rewards points sooner rather than later is a good policy.
This way you can plan how you use it rather than potentially having to scramble to figure out something last minute. , Most rewards systems include the stipulation that the credit card company can amend the contract at any time.
They may notify you, but they may not.
It usually isn’t drastic – maybe that flight to Lincoln costs 4,500 points instead of 4,000.
However, you should make yourself aware when this happens.
You don’t want to plan the yearly trip to Nebraska only to find out you have to pay cash when you weren’t planning to.This is another good reason to plan on using rewards points quickly.
Some credit card companies use the stick-and-carrot approach to rewards points – they want to keep you saving up points without ever cashing in. , Sometimes, the cards with the best signup bonuses have no intention of letting you continue to fork in the rewards.
Check out your contract, and do a cost-benefit analysis to see if it is worth the fee to cancel early.
If you will save yourself money by cancelling the card, pull the plug. -
Step 3: Redeem your rewards points before they expire.
-
Step 4: Check your rewards points system often.
-
Step 5: Cancel if necessary.
Detailed Guide
There are hundreds of credit cards you could pick.
This means that they are all competing with each other to get you to sign.
Look at the different sign-up bonuses to see who will fix you up with the most rewards possibilities up front.
For example, a good signup bonuses might give you high points or airline miles in the first several months for relatively little money spent.
If the cash equivalent of what they are offering you is at least 10% of the amount you spent, it’s a pretty good deal.Stay away from cards that offer you a tempting sum of rewards points up front, but then pull the rug out from under you.
This is especially dangerous if the sign-up bonus peters out long before your ability to cancel the card without incurring a hefty fee.
This process will help you determine which purchases will earn you the highest number of rewards points.
If you have a steady income, you may want to open a few different cards for different spending.
You will simply have more companies to pay the same amount of money at the end of the month.
For example, if gas station purchases offer higher rewards than purchases you make at a retail store, charge all your gas station purchases to that credit card.
Find another credit card that rewards you for retail store purchases. , Rewards points are an artificial currency created by your credit card company.
They aren’t susceptible to the same laws of nature of real money.
This means your credit card company can set and expiration date, and your rewards vanish in thin air.
Know your expiration dates, and get whatever you can if you find yourself approaching one.
Using your rewards points sooner rather than later is a good policy.
This way you can plan how you use it rather than potentially having to scramble to figure out something last minute. , Most rewards systems include the stipulation that the credit card company can amend the contract at any time.
They may notify you, but they may not.
It usually isn’t drastic – maybe that flight to Lincoln costs 4,500 points instead of 4,000.
However, you should make yourself aware when this happens.
You don’t want to plan the yearly trip to Nebraska only to find out you have to pay cash when you weren’t planning to.This is another good reason to plan on using rewards points quickly.
Some credit card companies use the stick-and-carrot approach to rewards points – they want to keep you saving up points without ever cashing in. , Sometimes, the cards with the best signup bonuses have no intention of letting you continue to fork in the rewards.
Check out your contract, and do a cost-benefit analysis to see if it is worth the fee to cancel early.
If you will save yourself money by cancelling the card, pull the plug.
About the Author
Victoria Fisher
Victoria Fisher specializes in arts and creative design and has been creating helpful content for over 20 years. Victoria is committed to helping readers learn new skills and improve their lives.
Rate This Guide
How helpful was this guide? Click to rate: