Mistakes to avoid when redeeming credit card points and rewards
Credit cards, when used responsibly, can be wonderful. They can help you make purchases, allow you to build a positive credit history, and potentially earn you a wide array of perks and discounts. One of the biggest benefits of credit cards is credit card points. These points can often be redeemed for discounts, purchases, or miles. However, they aren’t always easy to use, and there is often fine print that can prohibit you from getting the most out of these points. As such, here’s an overview of mistakes to avoid when it comes to using these cards.
Letting Them Expire
Credit card points can be great – but, if you let them expire, they are obviously no good to you! As such, make sure to read the fine print on your card points. Many cards have points that do not expire, so you can hold them for the rest of your life. However, some cards expire after a few years. As such, don’t just let them sit there! Make sure you use these cards before they expire, or they are a total waste.
Using the Wrong Card
Different credit cards have different benefits. For example, some American Express cards give 5% back on grocery store purchases, but 1% on other purchases. Then there are some Visas that give 2% cashback everywhere. Obviously, if you had both of these cards, you would use the American Express while grocery shopping and the Visa in other places. However, it can get very easy to make a mistake and confuse the two.
One of the most important things you can do is keep track of what bonus works for what card. This ensures you are getting maximum efficiency out of your cards and can use them to their fullest potential.
Losing Track of Rotating Bonuses
Some cards have quarterly, rotating bonuses, giving extra bonus points for using your card under a certain set of circumstances. These categories change every three months, so it’s not so often that it becomes too easy to lose track of. However, it does mean that you have to pay attention to your bonuses. As such, make sure that you set up some sort of notification or Email system that allows you to easily track what sort of bonuses you are entitled to, and when those bonuses change. You can then adjust your spending habits accordingly.
Not Checking Out the Online Portal
Many credit cards that offer some sort of cashback or rewards bonus also have an online shopping portal. These are almost always worth checking out, as they often contain exclusive offers on a variety of items that you may need. Furthermore, they will sometimes allow you to purchase gift cards to stores you already shop in, and these gift cards can be purchased at discounts. This is essentially free money!
The point is this: Make sure to check out their online shopping portal as a potential way to redeem your rewards points.
Not Maximizing Opportunities
More often than not, there are plenty of ways to add to your credit card points balance, as long as you work hard enough. For example, do you have payments that you make that you can shift to a credit card with higher rewards balances? If so, make the switch. Furthermore, what about laying out expenses for your office that get reimbursed? If the reimbursement occurs quickly enough, or if you have the money to float an expense, make any payment necessary. This will result in you ultimately being able to earn more points that you can use. This, of course, assumes that your office doesn’t have a policy against using credit card points like this.
To be clear, don’t increase your spending just to earn more credit card points. Instead, realign your spending so that you can get more points out of it.
Not Using More Than the Membership Fee
Some credit cards have points programs that are so generous it almost makes no sense. How on earth can these credit card companies afford such awesome cashback programs? Well, there’s an easy answer to that: Membership fees. The more generous the points, the more expensive the annual fees to hold that credit card and redeem those points.
For many people, the fee is still worth it. If you pay $99 a year but make $500 in points, you’re obviously in the black. However, for many people – particularly those who don’t use point programs often – the fee simply isn’t worth it.
You should always make sure you examine your spending habits and determine if it is worth the expense. Canceling a credit card usually isn’t a good idea, as it can lower your average credit history and potentially increase your debt to income ratio, hurting your credit score. However, you can call your credit card company up and explain the situation. Many card companies may waive the fee for a year, or reduce it. Short of that, there may be a way to downgrade your card so that you keep it, but don’t pay a fee on it. This will lose you access to their reward points, but if you were losing money on those perks, it’s a sacrifice worth making.
Credit card points and perks can be amazing reasons to open up credit cards. However, there are easy ways to miss opportunities, not use these cards efficiently, or even lose money on them. Make sure you read the fine print and are getting the most out of your credit card reward points!