A credit card can be a powerful tool if you use it correctly. One of the biggest advantages of using a credit card is getting the rewards that accumulate every time you make a purchase. Use the following tips to make sure you are getting the most out of your credit card.
1. Choose Something You Will Use
There are many different rewards cards to choose from. Some cards offer cash back, some offer gift cards, some offer
discounted merchandise and some offer travel discounts. The best rewards for you are the ones you will use.
Cash Back
This is the simplest and most practical option. With cash back, you are free to use your rewards for whatever you choose—there are no restrictions. If you aren’t sure which rewards you’d use most often, go with cash back and keep your options open.
Gift Cards
Gift cards are a great option if you’ll actually use them. Don’t settle for a rewards card that gives you gift cards to an obscure restaurant 3 cities away—choose one that will give you gift cards for stores you already shop at regularly.
Merchandise
Merchandise rewards can be fun, but make sure the products available are things you’d normally want. If you’d already planned on purchasing a new camera or blender, this could be a great option. If you would never buy those speakers on your own, merchandise rewards might not be the best fit for you.
Travel Mileage And Points
Travel discounts are very valuable rewards—as long as you can use them. Remember that many rewards programs come with restrictions about how you can use your points and miles. If you travel often, and will have lots of opportunities to use discounts, this might be a great plan. If you have one specific destination in mind and very specific dates set aside for travel, your rewards might go unused.
2. Read The Fine Print
Be sure to understand all the details of your rewards card. Check for restrictions, expiration dates, and changing terms.
Once you understand all the little details you can make strategic purchases. If you get extra rewards when you buy gas with a specific card, make sure to use it when you fuel up. If your points expire at the end of the year, plan your vacation before they run out. If one specific credit card gives the most rewards, use it for most of your purchases.
3. Don’t Get In Over Your Head
A credit card is only a helpful tool if you use it carefully. If you let your spending get out of hand, debt will become a burden that restricts your choices and your future. Travel points won’t be much help if your credit score is too bad to purchase your next car.
- Don’t spend money just to get rewards. Only purchase things need or normally buy.
- Pay your balance at the end of each billing cycle whenever possible—you’ll still get rewards, but the interest won’t build up.
- Only sign up for a new credit card if you can afford to make the payments on time.
When you use rewards cards responsibly and wisely, you can reap a lot of benefits. When you use them recklessly, they’ll restrict your freedoms. If you need help reducing your credit card debt, check out this helpful article. To make the most of your rewards card, choose rewards you’ll use, read the fine print, and keep your spending in check—then sit back and look forward to that cash back or cheap vacation!
photo credit: Credit Karma via photopin (license)
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