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Max Your Credit Card Rewards

By Richard Greenwood

Republish: EasyPublish™
Published: 20Oct2008
Word count: 545
Viewed: 382 time(s)

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There's a reason card issuers offer so many reward credit cards: people actually like them. Many people enjoy the thrill of getting a return on all the spending they do. Whether you charge large purchases or more mundane transactions to your credit card, it is necessary to have a plan to maximise the value you derive from your reward credit cards.

Here are some steps you can take to leverage your normal household spending to generate points from your reward credit cards.

- Pay in full, every time and on time. Reward credit cards tend to attract interest rates in the high teens so they are not for those who intend to carry a certain level of debt. Carrying a balance will subject you to interest charges and completely negate the benefits of rewards. So will late payments, which attract stiff penalty fees. In addition, missing the due dates for payments may lead to forfeiture of your points or suspension of your privilege to earn rewards.

- Be aware of your spending profile. There is a bewildering array of reward credit cards, and each scheme tends to fit a different spending pattern. The card may put together a strange set of items which qualify for their rewards and cash-backs. There should be a couple or so reward credit cards that will best fit your spending profile, allowing you to maximize your points earned or cash-backs from your ordinary expenses. If you travel a lot, you may need frequent flyer cards with rewards for miles and hotels, such as those offered by American Express credit cards. If you do not want to lose any points in the conversion to products, you can opt for cash-back reward credit cards.

- Maximise reward credit cards usage. Many people write a cheque, pay cash or use a bank debit card for groceries. Necessary spending for groceries can be a great source of points, so don't waste all that potential to harness them. Use the cards for online payments on household bills (if your utility company allows it and if there is no additional fee imposed on card payments. Check if it is possible to pay your monthly mortgage or rent by credit card. These necessary recurring expenses will give you substantial rewards earnings each month. But make sure to pay them all off every time because interest charges on the large amounts involved will erase the value of your reward points. And, make sure there is enough room in your credit limits (you can always ask the card issuer to increase your credit limit).

- Make sure there are no blackout dates. There are reward credit cards that set expiration dates on your earned points. All your hard-earned points will be for naught since you can no longer redeem them after the expiry. Pick the reward credit cards that do not have these restrictions so you can enjoy what you have earned regardless of how long it takes.

It would be advisable to charge to your rewards credit card as much of your household spending (whether necessary or discretionary) as you can. You will maximise your credit card rewards this way. In addition, it will be easier for you to track all your monthly outgoings through the monthly statement.

Article on reward credit cards by Richard Greenwood, Director of click4credit.com.au - part of the Click4Group of websites which compare financial products including cards and saving accounts in Australia.

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