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Tips for Optimum Use of your Credit Card Reward Programs

Tips for Optimum Use of your Credit Card Reward Programs
By Brad Trupp (c) 2009

Credit card reward programs and other shopping loyalty programs are an excellent way to save or make extra money.

Depending on what reward and loyalty programs you use, and how much you spend, you can easily accumulate $500.00 or $1,000 or more in rewards or savings each year.

These tips will help you to maximize your results.

Understand your Spending Habits

What kind of spender are you?

Do you travel a lot and charge a lot of flights, hotels, and meals? Do you spend a lot of money on gas or groceries?

Your reward plan must be in line with your type of spending and your reward goals. No sense collecting travel miles for your favorite airline if you only fly once a year -- you could probably do better by waiting for a sale.

One thing to consider is credit cards that offer cash back rewards. This way you have infinite choices on how to use the rewards. To use an over-used cliche -- cash is still king.

Avoid Cards with Fees

If a card has an annual fee, make sure you know what additional feature you are getting for that extra cost.

For example, if you pay $100.00 to get a card that pays 2% cash back rather than 1%, are you realistically going to spend over $10,000.00 to offset the cost of the annual fee?

Avoid Spending just to get Points

Think before you spend.

Would you still buy that extra "whatever" if you were not getting points for it?

If having a reward card leads you to uncontrolled or unneccesary spending, then do not get one.

Know when to Redeem Points

Look at this loyalty program offered by one of my local grocery stores --

Reward Points Points to Level Points per Dollar
$5.00 725 725 145
$10.00 1375 650 137
$15.00 2000 625 133
$20.00 2600 600 130
$25.00 3200 600 128

So you can see from this example that it you get the best return on points per dollar at the last or $25.00 level.

Over the course of a year with multiple redemptions, you may easily earn any extra $25.00., $50.00 or more.

For this particular program, the cycle starts over after $25.00. It makes sense to hold off on redeeming points each time until you hit the maximum level.

Double Dip where Possible

Can you pay with your credit card to get points and use a store loyalty card at the same time? This way you can get points from both programs in one purchase. This is sometimes referred to as double-dipping.

Of course, if you are not able to pay off your purchases each month, or if you currently carry a balance on your credit card from month to month, then this tip is definitely not for you. The interest charges on your balances negate any potential benefit.

Be aware of Program Rules

Be aware of expiry dates for your various reward programs.

Do your points expire after 2 years?

Do they expire if you do not use your loyalty card for 6 months?

Put any critical dates into your personal calendar so you do not accidentally lose out.


Put reminders into your personal calendar to use the points annually or semi-annually.

Sometimes it is good to have a purpose in mind whether it be summer holidays or that seasonal gift buying frenzy.

About the Author

Brad Trupp is the Editor of 4hb.com - resources for your continuing success.

Tags: Personal - My Money | Money Matters



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