Friday, December 27, 2013

How to Maximize Credit Card Rewards during the Holidays

December and January are the two busiest months of the year, with everyone rushing to buy last-minute gifts for the holidays, even shopping and partying until early January while everyone’s on vacation. If you are using your credit card to cover your holiday expenses, it’s advisable to get the most out of your credit card rewards.

Here are some tips on how you can maximise rewards during the holidays:

1.    Focus on your interest.

          You won’t get what you want if you don’t focus on your interest. Before signing up for a credit card, ask yourself what specific benefits you want… do you want miles for an airline? Are you hoping to get shopping rewards? Are you planning to score gasoline points? Do you want cash back rewards? Make sure that when you pick a card, you don’t get one that offers benefits you won’t use anyway. You should also be careful in spending your money—don’t spend more than you would normally do just to get rewards. Another tip is to pick a card that provides you with the option to choose either points or cash back so you can choose which reward you want depending on your needs at certain times.

2.     Choose cash back.

          Cash back reward is still considered as one of the best advantages of credit card usage simply because you can spend cash however you want to spend it. However, most credit card users opt not to get a card with cash back rewards because of the amount of money they have to spend in order to get this benefit. Another reason why most card holders opt to choose other cards is because they would rather let their points accumulate to get something they want instead of going for the cash back benefit.

3.    Discard other less advantageous cards

          To get the most benefits out of your card, choose the card that offers the biggest benefits, rewards program, has a zero percent interest rate for the first year of use, as well as one that provides you with double or triple rewards when you make a balance transfer.  Then after selecting, transfer your balance to that account and close off your other cards. However, you may only do this if your credit score is good, you pay your bills on time, and you are far from maxing out your credit limit on your other cards.

4.    Take time in deciding which credit card to choose.

          Most current card holders apply for a credit card without putting much thought into it. Take time to choose which card provides the best benefits instead of making a quick decision based on a specific freebie offered. Caution is also advised in choosing a card with annual fees as annual fees can add up and really cost you more than just choosing a cash back that doesn’t require you to pay annual fees.

5.     Keep track of your reward points’ expiration.

          Reward points have expiration dates nowadays. To prevent wasting money along with the considerable effort you spent in collecting reward points, put the expiration date of your credit card’s rewards a few days ahead on your phone’s calendar. Better yet, schedule a day in your calendar when you plan to claim your reward points and set an alarm so you won’t forget to claim it before it expires.

6.    Read notices from your credit card issuer.

          Some credit card companies change policies and usually send notices at your home address via snail mail. To ensure there won’t be any surprises, always read the notices you get from your credit card issuer. An example of change is implementing fewer points in their rewards program, or reducing the percentage of cash back rewards. Reading notices will allow you to be more cautious in your spending. You can also take the opportunity to look for a card that will provide you with more benefits in case your policy changes and you don’t think those changes will be in your favor.

Maximizing credit card rewards is easy if you take time to consider what you really want. The tips above should help you get the most benefits out of your credit card rewards program and enable you to have more of which you can actually use.

Note: This is a guest post by MoneyMax, a Philippines’ leading financial comparison portal which helps Filipino consumers make the right financial decisions as they settle on the best credit card, home loan, broadband plan, and more—fast, comprehensive, and free.


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