Common Mistakes in Using Credit Cards for Rewards
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Credit Card Applications » Research » Guides » Travel with Credit Cards » Common Mistakes in Using Credit Cards for Rewards

Common Mistakes in Using Credit Cards for Rewards


Updated: December 26, 2012

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Credit card companies are in competition with one another when they give out rewards. They give your preferred rewards to get you to avail their credit cards and get you to spend your money under their terms. You can't say you can avoid the temptation especially when the terms, conditions and rewards are very attractive. But these rewards and offers can cost more than the bonuses you'll get. Here are mistakes you should avoid while using your credit cards. 1. Read the fine prints on your credit card deals. You might fail to notice the stated frequency of increase in the interest rate that the credit card companies give within a month, or a year. Some interest rates start low but increases gradually. 2. Avoid high annual percentage rates. A single credit card may have several APRs which include introductory APR and tiered APRs. You have the standard APRs for cash advances and balance transfers that are often higher that the APR for purchases. You may even get a penalty APR when you are late in your payments. If you carry two different credit card with different APR charges, one for long-term the other one for short term purchases, you can protect and maximize your earning because this will limit the amount of interest rate you have to pay. 3. Avoid making long-term charges with your credit cards. Purchase only what you can pay off the soonest possible. 4. Avoid overspending for you to earn more. Anyone who has a credit card is always after a certain reward and you are not exempted. You have the tendency to spend more to gather enough points for you to redeem an item or a service. If you don't monitor your spending habits, you might end up spending too much more than the actual price of the reward you're trying to pursue. 5. Avoid annual fees. Most credit cards have annual fees and this has always been a part of the credit card companies system. Aside from APRs, you have annual fees for Airmile Credit Cards, Gasoline Credit Cards, etc. 6. Be aware of caps and expirations. Credit card caps place a limit on how many points you can earn in a period of time, this can either be monthly or annually. One of the major disadvantages of caps is the more points you earn, the lower the conversion value will be. Some credit card companies can be flexible with the expiration of your points earned. Mostly they allow up to 36 months to use your points earned especially if you have a good standing. However, you must be late in paying your payments or else your points and rewards will be forfeited. Make sure you fully know how your credit card work and so are also update on how you can keep your points. You've spent too much to earn your points, so when you lose them due to a simple mistake that you're done, your time, effort and money have gone to waste.

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