The secret to enjoying the best advantage that your reward credit card offers is to understand the policies of the rewards program and to plan your action according to the rules. Remember that different credit card companies impose varying rules when it comes to rewarding their cardholders.
Today, let us discuss practical tips on how you can maximize your credit card rewards without getting immersed in bad debt:
Know how points are earned. What kinds of transactions will get your reward points? Sometimes, you may only get points when you made the purchase from an affiliated establishment. If you’re going to shop in stores that is not affiliated with your credit card issuer, then you may not get any point from your purchases. Hence, it is very important to be clear about the mechanics of the reward point system.
Plan your purchases ahead. It is recommended that you set a goal as to how much you plan to spend with your credit card for the month. This way, splurges or unplanned spending can be avoided and you can be certain that you will be able to pay off your balances on time.
Before going out to shop, write down the list of items that you need to buy. Never try to spend more just for the purpose of collecting reward points. Such a habit can only get you in trouble. In your attempt to earn points, you could incur a very large amount of debt that would be difficult to pay back.
Rack up your points wisely. Apart from purchasing items, how can you collect more points without going over the budget? One efficient technique is to charge your utility bills to your reward credit card. Examples of such bills are telephone, cable, internet and other bills that you pay on a monthly basis. Nevertheless, if you’re going to do this strategy, make sure that you will use your cash to pay off your credit card charges right away.
Never pay the interest rate. To really benefit from your rewards credit card, you should eliminate all extra fees from your bill. One example is the interest rate. Yes, you can completely set yourself free from interest rate charges simply by paying your full balance each month. By doing this, you can save yourself anywhere from 14% to as much as 20% additional APR charges.
Avoid penalties. Credit cards with rewards are usually more stringent particularly with payment submission. YOU may be charged with an expensive penalty fee if you are late with your payments even for if it’s just one day after your due date. Hence, be conscious about your obligations.
As much as possible, post your credit card payment ahead of time. Don’t wait until the last day before you submit. If you have the tendency to forget your due dates, it’s best to arrange an automatic payment system with your bank to avoid getting unnecessary penalty charges.
Aside from avoiding the late fees, you should also avoid the over-the-limit penalty costs by keeping your credit card balance within your borrowing limit.
