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Friday, February 21, 2014

Do Credit Card Rewards Pay Off?

Credit card rewards are one of the things that convince many people to get a credit card. You could use the reward points that you earn to get free dinners, flights, and electronic gadgets. But what can you do to make sure that you maximize your credit cards’ reward points that they really pay off? Read on to get tips on how to do just that.

Don’t Carry a Balance
Whenever you use a credit card in order to earn reward points, make sure you pay your credit card bill every month otherwise the interest you’ll pay on the balance will likely be worth more than the reward points you’ve earned.
The best way to use a credit card is to only use it to pay for goods and services you have the cash to pay for. This helps you earn reward points and take advantage of deals offered only to credit card holders. This also helps you avoid falling into credit card debt and paying for interest and penalties.

Don’t Pay Late
Your credit card reward points may be forfeited by the card company if you pay late. Avoid this so you get to keep your reward points.

Take Note of Your Spending Pattern
Where do you usually shop? If you shop mostly at one particular grocery, then you should consider getting a co-branded credit card from that grocery because this could give you more reward points when you shop there. Same goes for gas station credit cards.

Take Advantage of Promos
Many credit cards have promos that let cardholders earn double or triple points for certain purchases. Take advantage of these promos but only when you already have plans to buy that thing because buying something that you don’t need just to get reward points usually doesn’t pay off.

Reward Points Redemption Sales
Aside from promos that let you earn double or triple reward points, credit cards also sometimes have reward point redemption sales. Keep an eye out for these, perhaps they have offers for something you really need or want.

Don’t Let the Reward Points Expire
If you read the fine print of your credit card agreement, you might find that the credit card reward points have expiry dates. Don’t waste them by letting them expire. If nothing in the rewards catalog catches your fancy, you should considering donating your points to your chosen charity as some credit cards will allow you to do this.

Reward points are just one of the benefits you can enjoy with your credit card. However, these can only pay off if you don’t carry a balance on your card because then you’ll be paying interest on your card and that will most likely be worth more than the reward point you’ve earned. The reward program of credit cards can differ so study the terms of these programs carefully to make sure you’re making the most of your reward points.

The best way to look at reward points are as bonuses you get for using your credit card wisely. Don’t be tempted to buy something just for the sake of getting a reward point and also look into how getting a reward point stacks up against getting a cashback on your purchases. Cashbacks may provide more dollar value than getting reward points for your purchase.

This contribution is exclusively written for by, the Philippines’ leading financial comparison portal which helps Filipino consumers make the right financial decisions as they settle on the best credit card, home loan, broadband plan, and more—fast, comprehensive, and free. Visit Money Max blog for more financial tips and advice.

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