Credit Card Guide

Credit Card Guide: How to Keep Those Rewards

All those miles, points and rebates that inspired you to spend hundreds and display responsible payment habits may wave you last goodbye. Now you have to get really creative about keeping and cashing in what's left from the previous year.

The latest currency devaluation cracked banks' credit card business more painfully than ever and they do not hesitate to pass the pain over to their customers. You can expect further reduction in the amount of rewards to be redeemed, toughening of requirements and even abolishment of some programs. If you can't bare the possibility of losing your money, make use of this credit card guide. We've looked into the major rewards programs changes to take place in 2009, so you can make your arrangements before you find yourself at a loose end.

So, if you have a frequent flyer card, you'll see the increase in the number of miles required for a free flight. New restrictions may apply which means fewer credit card applications available, limited choice of destinations, shorter expiration dates and the like. Keep in mind that airlines may go bankrupt any moment. If you store a substantial number of miles or points, say tens of thousands of them, hurry up to cash them in. Why wait for something bigger when you could have your share now? Even if it's not enough for a free airline ticket, it's better than nothing - you can add to the value with your pocket cash if you like and get that free air trip. Major card companies that have already introduced alterations in their rewards programs rules are American Express, Capital One and Citibank.

Owners of any rewards card will find it harder to earn rewards due to the slash in credit limits and increase in points and miles thresholds required for redemption.

Credit card limit cuts affect good and bad customers alike. So even if you have excellent score, you're not safe from seeing your available funds reduced by half, at best.

The purpose of our guide is to persuade you to start acting today. Don't wait for a notification letter or an insert into your statement. If you have at least half of the eligible amount, cash it in and add it to your own funds to buy a ticket.

As to the interest rates and fees. Chances are you'll see your 0% APR introductory period going down from 12 months to 6 months and higher fees imposed. For you it means you have to speed up your debt repayment and exclude any possibility of late payments.

If you plan to apply online for balance transfer now, beware that there is a 3% transfer fee and no fee cap on all cards. So estimate all the gain and risks before you consolidate the debt.

The forecast of a credit card being available only to the upper class has extraordinary tendency to become reality. If it is so, it'll take a long time to root itself. So, take this time to reap the benefits that legally belong to you under your card agreement.

Bryant Park

Bryant Park is a financial consultant for one of the companies listed on Wall Street. He writes on a variety of topics ranging from credit cards to different loans that can be availed by consumers. He holds a bachelor degree in Financial Services from Dartmouth College.