Rewards credit cards are potentially a great way of actually profiting from your credit card usage, giving you the opportunity of obtaining products and services at a discount without changing your current spending habits.
However, like all credit cards, they exist to make money for the issuers, and not the cardholder, and if used carelessly will not really provide you with much benefit. In fact, as reward credit cards generally have higher interest rates than normal cards, unless you make the most out of the rewards program then you could actually end up out of pocket.
Here are some simple ways to maximise your reward card benefits:
Clear Your Balance
As with all credit cards, it’s best to clear your balance every month if at all possible, or at least pay as much as you can, so as to keep interest charges at a minimum. However great the rewards scheme, the benefits will be wiped out if you’re having to pay interest on a substantial balance.
Although some reward cards pay a flat rate of points wherever you spend using the card, many cards will give you a better return at certain designated retailers or outlets. Make sure you know if any such deals exist, and make use of them where you can.
Pay Regular Bills By Credit Card
Nowadays it’s possible to pay nearly any kind of regular bill online by credit card. Gas, electricity, water rates – setting up regular credit card payments for these bills can really make a difference to your points tally. Make sure though that you’re not being charged a fee to pay by credit card, and that there isn’t a discount available for direct debit payments which might end up being the better option overall.
Day To Day Shopping
Groceries, petrol, car parking – all of these can now be done using a credit card with the minimum of fuss, and all will help to build up your points total. Just be sure to repay what you’ve spent so as to avoid interest!
If you’re married or have a partner, it is usually possible to have a second card issued on the same account in your spouse’s or partner’s name, which they can then use for their own day to day spending. This will obviously build up extra reward points, so long as the additional spending is backed up by additional repayments and doesn’t get out of control!
As we can see, there are several easy ways to maximise your credit card rewards, and what’s more, all are equally applicable to cash back credit cards aswell.