There are several tips that you can pick to make the most of your credit card rewards without really hurting your own finances. A lot of times, rewards are nothing but marketing strategies devised by the credit card companies to make you spend more than you intend to. There are always terms and conditions and numerous other caveats which don’t allow you to take full toll of the rewards
. Here are some tips that will help you deal with rewards carefully.
Don’t shop for rewards
If you have budgeted to shop for $100 stick to it. If a credit card offers you $25 discount if you shop in excess of $200, don’t fall for it. This is because you are spending an additional $75 without your realizing it, just to avail the discount. In many different ways, we all end up doing the same mistake of trying to make the discount count. Often we end up spending far more than we need to and more than easily blow up whatever saving we get from the discount. So the idea is to make use of the rewards as a benefit, but never to shop for it.
Take note of your credit limit
Sometimes to make discounts for milestone expenses count, we go out of the way to purchase things around in a supermarket or a mall. But you have to make sure you don’t cross your credit limit. If you do, you end up paying overdraft fees unnecessarily, which eats into your savings anyway. Similarly, if you make too many purchases and end up not being able to repay the money before due date, you have to pay late fees. It also affects your credit history. So your credit card rewards end up getting wasted.
Keep track of expiration dates
Although there are loyalty points to redeem they might be expiring pretty soon. So when you are making plans around redeeming your reward points, make sure you know when they expire. It is also a good idea to read the fine print and check if there is any cap on the number of points that you can redeem within a month. Often you shop to redeem points and then realize you can use only certain number of points. To avoid embarrassment you end up paying the rest of the money which isn’t really a smart use of the credit card rewards at all.
Check the cash back mode
Cash back cards might not always give you cash back. Sometimes, you have to redeem that cash by sending a request explicitly to the credit card company. Only then will you receive a check for your cash. It might be possible that you will be offered a deduction on your next month’s credit card bill. These are nuances you need to be aware of instead of getting really excited about getting some cash back after the expenses. If you don’t read the fine print you might end up not benefiting at all from the rewards.