Did you know that more than 30% of people in the United States never redeem the credit card rewards they’ve earned?
When you first sign up for a card, you may have been focused on the rewards. Over time, if you’ve forgotten about them, there are a few things to keep in mind. You can save money and get the best discounts if you check your credit rewards.
Continue reading if you want to discover all there is to know about credit card rewards!
1. Rewards May Expire
One of the most important things to compare when you look at credit card rewards is their expiration dates.
Look into your banking reward guide to determine if your points carry over into the following years. If you’re on a use-it-or-lose-it system, make sure you redeem all of your points before they are void.
Most credit card companies let customers redeem rewards several times a year. Depending on how large the rewards are, you can even split them into multiple payments. Even if you have small rewards, the discounts add up in the long run.
Avoid the habit of blindly spending without checking your rewards balance. You may have a lot of unclaimed rewards banked up already!
2. Perks Vary
Depending on which credit card you sign up for, you will gain access to certain perks.
For example, many airlines have teamed up with credit card companies. When people use their cards and spend money, they earn airline points. If you tend to travel often, these are wonderful choices and typically have higher credit limits.
Most other credit cards offer discounts at certain stores and retail shops after you spend a specified amount. Make sure you compare the rewards for each type of card, even if they are from the same bank.
Very few credit cards offer cash rewards, but you should still keep an eye out for them. Crypto rewards have been the most common recently. Cash-back rewards on gas purchases are another trend for 2023 since gas prices have been rising.
3. Interest Fees Can Be High
It’s common for people to see an ad for a great card promotion, only to discuss the high-interest rates attached.
Before you signup for your credit card, make sure you know what your interest rate will be. It’s common for companies to promote low-interest rates, but these only work for a specified time. If you can’t pay off your debt in time that the interest raises, you may find yourself buried in bills.
Revolving debt often stems from credit cards because people can’t pay it back in time for the interest rates to hit. If your interest rate is ever higher than 1%, the card company will be making money off of you.
4. Methods of Redeeming Points
If you’re already processing payments online, you can also control and redeem your points.
While you’re logged into your account to make a payment, check your points. This will get you into a monthly routine of checking and prevent expiration dates from surprising you. When you apply for the card, check the other methods for redeeming your points.
Most companies will let you redeem them over the phone or in person, but these processes take much longer.
Another factor you’ll want to check is the ways you can get your rewards. Will you get money uploaded to your card, a check in the mail, or something else?
5. Annual Fees Could Change
When you sign up for a credit card, you likely won’t have to cover any bank fees.
Over the next few months, however, you may receive an annual fee charged to your card. Some credit card companies, like Amazon, add annual membership fees to your card, without you even noticing.
Ask the banker what their annual charges are like and if they ever change. Not only will these fees get added to the balance you owe, but they will also increase your overall payments since interest rates apply to the fees too.
If you aren’t sure you’ll use a card often, and it comes with annual fees, you may want to look for other options.
6. They Can Improve Your Credit Score
You can find big rewards with credit cards, but most people overlook one of the largest benefits.
Regulalry using your credit card and paying it back will improve your credit score. If you’re about to buy a new home or car, you can use your cards to increase your score and buy necessities. Make sure you always have the money to pay back the card and do it as quickly as possible.
Making the minimum payments will keep you in revolving debt for longer and you’ll pay more.
7. You Need Self-Control
The spending rewards can be an advantage, but if you don’t monitor your habits, you could wind up in major debt.
You need to monitor and work on your self-control skills when it comes to using your cards. Instead of over-using them, you should charge small items and pay them back quickly. Once you get in the habit of swiping without checking, you may find that you aren’t using your cards for the right reasons anymore.
Only buy products you will use, don’t spend just to earn the points.
Make the Most of Your Credit Card Rewards
Although credit cards give you access to money you may not have, they are also used for earning points.
Whether you want to cut costs at the grocery, pump, or in the stores, you can earn big credit card rewards by spending. Before you sign up for just any card, make sure you review the rewards and conditions to get the most out of your money.
If you want to learn more about working with a credit facility and managing your finances, read our blog for the latest content!
