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Research: Tips to use credit card rewards the right way -

Using credit card rewards often needs the right kind of planning. Credit card issuers do not throw it away easily so hence, you need to have the right strategies to ensure you use the rewards in a way as to benefit from them. Choosing the right kind of reward program is really the key if you want to make them count.

Be aware of the fine print

Knowing the fine print of your credit card is the key to ensure that you don't waste your rewards. There are always lots of caps imposed by card issuers. If you are not thorough reading and understanding the fine print, you could end up missing a vital point which says every month some reward points will expire if you don't use them, or the discount the card was promoted to offer has a stipulated expense limit before you can avail it. Similarly, cash back is promoted as up to 3%, but it is not necessarily that amount all the time. In fact, most cards offer around 1% on all purchases and 2% or 3% for specific purchases at gas stations that you will have to utilize.

Credit card rewards and the fees

If you are really looking for a credit card with impressive rewards, you need to ask yourself, what are the fees on the card? If you are paying annual fees, initial fees and other such charges, your rewards might not really provide you with much of a saving. Similarly, if your card offers you rewards worth $100 only after spending $5000, it might not be worth it. So, credit card rewards should be considered on a relative basis rather than on an absolute basis. Some of them are carefully crafted to make the credit card customer spend more and receive less.

Airline miles

Redeeming your airline miles to receive discounts on your airline tickets could be one of the toughest things that you can encounter. Most of the dates, as you notice would be blackout dates. Also, most airlines will not allow you to redeem points for tickets for your partner, which could pose another problem. It is therefore a good idea to go for cobranded cards where the bigger airlines are involved. Some airlines have a better reputation of providing value to the credit card reward points. Even if you cannot redeem the points on airline tickets, you can use these reward points in various other ways. For example some credit cards allow you to use your airline miles to subscribe to magazines. In other cases you can even donate to charity.

Are you heading towards holidays and big spending?

If you know that you are going to spend a fixed amount for your holidays or vacation, it is well worth going for the credit cards which offer rewards for specific targets. There are credit cards which offer bonus miles, cash backs and discounts if customers reach specific spending targets. You can make them count by spending and managing a decent discount.