Credit card rewards is a marketing strategy adapted by many credit card companies to attract customers. The credit card rewards have been customized to meet the different lifestyles of varied customers. A survey conducted by consumer payment choice of the Federal Reserve Bank of Boston, found that, more than fifty percent of the American population use reward cards regularly.
The earning of reward points depend entirely upon the terms and conditions that the issuing bank sets. Generally how much a credit card holder earns depends upon how much he spends and also if he is able to pay off his credit card bills
before the grace period gets over. However steps can be taken to maximize the earning capacities of the credit cards.
Steps to earn credit card rewards
1. The first step that can be taken is to prepare a list of the possible bills that can be paid with the help of credit card. All household and utility bills should also be included. In short make a list of all the ways in which credit card can be used to make purchases and thereby earn reward points. Care should however be taken that the purchases made are repaid back immediately to the credit card account within the grace period.
2. Before going out to shop with the credit card, the available credit limits must be checked so that the purchases made are within the budget. The basic principle is to use the credit card within limit to earn the maximum points
3. Concentrate the earnings on one or two cards. Too much spending on different cards will not allow the accumulation of the points fast and therefore will not avail greater rewards.
4. Credit card reward programs can be of various types. Air lines miles, rebates, discounts, travel and accommodation offers are some of the many offers that can be availed in exchange of credit card reward points. The issuing credit card company has set it’s own terms on the availing of the different reward options. Usually a slab is set. Each slab has a range of points earned and the various reward options that will be available within that range of points. It is therefore necessary that the credit card user selects the type of reward that he wishes to avail. If he is a frequent flier then credit card reward in the form of airline miles will be best suited for him.
5. Finally some basic guidelines need to be followed that will allow the credit card user to earn the maximum reward points. These guidelines are as follows:
- Credit cards with reward options usually have higher rates of interests and therefore repayment of the entire credit card bill before the last date should be ensured.
- The grace period for which the reward points remain valid varies from company to company. The grace period should be well studied and users of the credit card should try to avail the reward offers within the validity period of the credit cards.
With proper and systematic use of the credit card a user can earn reward points very easily.