Maximizing Credit Card Rewards

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.

Credit card rewards are a great incentive to get you signed up for a new card, but are you using yours? An estimated 48 million rewards points earned by American consumers each year go unused. That’s a total value of $16 billion. Regina Novickis, consumer expert with Slickdeals, offers these tips to help you maximize your credit card rewards.

1)    Align rewards with your interests – Different cards work best for different interests. For example, if you get an airline rewards card, but don't really fly much, then the card is essentially worthless to you. Especially if you end up paying an annual fee, make sure that the reward is worth the spend. A fee of $80 may seem modest, but that could mean you have to spend $8,000 in one year just to break even.

2)    Worth the wait - If you're not in a hurry to get a specific credit card, do your research on the best incentives that that card has had. For example, Chase Freedom is a great card, but it's had a $200 cash back offer in the past as opposed to the regular $100 offer. Same thing with the Southwest card - it's normally 25,000 points, but every couple of months, the card is offered with 50,000 points. Slickdeals is a great resource to help you research this. Its community of nearly 9 million users are out there scouring the best deals every day, and comments are available on each deal to help you better understand price history and deal value.

3)    Consider a balance transfer - If you're about to make a large purchase or you're already in debt, consider getting a balance transfer card. Slate, for example, is one that often gives you 0% APR for the first 15 months, so you're essentially borrowing money for free. Just be careful not to get into trouble with this one. If you keep transferring a balance, but then racking up a new balance on your other cards, it’s a quick way to get into a debt cycle.

4)    Read and track changes in terms - when first signing up, make sure you fully understand cancellation policies. Similarly, even dense, small-print notifications that come in the mail should be examined. This could mean fewer points or a lower percentage of cash back; and it may be time to start shopping around.

5)    Always know the best value for your points or miles -  You can use points to buy things like an iPad, but those same points could be transferred to an airline to fly business class internationally - a value of $600 vs. $1500.

AlertMe