Making The Most Of Credit Cards With Rewards Programs

Many consumers today carry at least one credit card in their wallet, and most have a few different accounts open. If you are like most, at least one of your accounts has a rewards program in place. Such rewards programs offer you a way to earn financial rewards in the form of cash, gift cards, or valuable gifts by simply using your card to make purchases. Each dollar you spend is credited to your rewards program. Once you have accumulated enough points or credit, you can then redeem your points or credit for a reward. In some cases, these programs have helped consumers enjoy some benefits for swiping their plastic to make purchases. In other cases, however, they have actually cost consumers money. So how can you make the most of your rewards programs?

Consider the Costs

With many rewards programs, you will have to pay a fee for the privilege of joining the program. This may be an annual fee or joining fee to enter the program. Perhaps the program itself has free enrollment, but your card has a higher than normal annual fee associated with it. If you want to ensure you get the most out of your rewards program, you should keep in mind what the rewards program may be costing you each month or year. You should also keep in mind that these costs may be incurred whether you actually make use of the program or not. Joining a rewards program and then not putting it to use can be rather costly.

Pay Balances Off in Full

Rewards programs only benefit you if you use your account for purchases. Some consumers make more charges on their credit cards than they can afford to pay off in full at the end of the month. While this may help them earn rewards points and credit, it also creates a situation where interest charges accrue. The cost of using the card to earn points and credit gets more costly when interest charges are applied to your account. In order to make the most out of a rewards program, make special effort to ensure that all balances are paid in full each month. Some consumers simply make many payments to their credit account each month, paying off balances as soon as they are charged.

Review Program Limits

It is also important to consider the limits of the program. Some rewards program have unlimited reward potential. With this type of rewards program, making many charges can be beneficial, provided those balances are paid in full each month. If limits are in place, however, making more charges simply increases the likelihood that interest charges may accrue without adding benefit to you. You should review program limits carefully before opening a rewards program account. It is best to find a rewards program with lower fees and that does not place a limit on your potential rewards.

The Rewards

It is also important to find an account that offers you rewards and prizes that you want. Most consumers will benefit from cash awards and gift cards. However, specific prizes like hotel points or frequent flyer miles may only be beneficial to some consumers. Find a rewards program that you can truly benefit from in order to make the most out of using it.

There are numerous rewards programs you may apply for today. Keep these factors in mind when shopping for a card with a rewards program.

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