How to Use a Reward Credit Card and Avoid Bad Debt

Is it possible to make use of a credit card for spending and prevent bad debt at the same time? The answer is yes! Through strategic and also responsible usage of your credit card, you are able to keep it in control in accordance with your purpose while you avoid from your debt trap.

In the event you own a credit card with rewards, you ought to be a lot more mindful of the way you make use of that plastic to your favor. Without a doubt, a reward credit card can bring a lot of benefits for its holder but only if you know how to use that properly.

In the following paragraphs, we present crucial recommendations on how you can utilize that credit card, particularly the reward credit card to pay bills while steering clear of bad debt at the same time.

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Five Factors That Can Make a Reward Credit Card Unrewarding

Are you likely to sign up for a reward credit card this year? If yes, ensure that you will be likely to make the best choice. Moreover, you should follow a strategy to benefit from the advantages and prevent the risks. Consider these five factors that can make a reward credit card unrewarding.

1. High maintenance costs. How much will you need to spend to keep your reward credit card active? Some of the top credit cards have really steep rates of interest as well as annual fees. The yearly fee can vary from $50 to $100 and above.

If you must pay so much on the annual fee to keep you card active, you should make sure how the reward program is actually exceptionally great. If you happen to be paying more than what you are getting, is the credit card still really worth keeping?

2. Rewards that quickly expire. If your credit card imposes an expiry time period on the rewards a person collected, you could find yourself losing all those points if you fail to redeem them on time. The ideal credit cards with rewards ought to allow you to keep the points for as long as your account will be active.

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How to Make the Most Out of Your Credit Card Rewards

Some people have a totally negative idea about reward credit cards. Even so, credit cards with the right reward program can in fact be described as a great tool to save money once you learn how to use it appropriately. Consider these tips concerning how to maximize your credit cards with rewards.

Use your card for daily purchases. With the holiday celebrations coming, you can use your reward credit card to pay for groceries, gifts and other holiday expenses. Just ensure that you have sufficient cash to pay off your balance punctually.

Use your card for utility bills. Consider paying your bills such as electricity, cable television, internet, as well as other monthly services with your credit card with rewards. This way, it is possible to earn points monthly even without making a single purchase.

Use your credit card for a large purchase. The bigger the amount of purchase an individual charge to your credit card, the more points you earn. Are you thinking about buying a brand new gadget, appliance or even home furniture this holiday season? If so, this could be the time for you to make use of your best credit card rewards and also rack up points.

Read More: How to Make the Most Out of Your Credit Card Rewards

Use Your Reward Credit Card to Get More from Your Spending

A reward credit card will be your best partner especially this holiday season. Nonetheless, the only way you can genuinely benefit from a reward credit card is to use it strategically. Consider the few suggestions concerning how to use a reward card to get more out of your spending:

Rack up those points. The more you use your own credit cards with rewards to pay for bills and make purchases, the more points you can earn. Are you planning to buy gifts for your holidays? Are you planning to put together a feast for your loved ones? If so, it is possible to take advantage of this opportunity to use your reward credit card for these expenditures and get rewarded at the same time.

Understand the reward program. Different issuers have various reward programs therefore it is important to be familiar with your own credit card. Have you been using the reward card for a long time? However, it is a good idea to review the Terms and Conditions of your reward credit card before using it with regards to spending. Get to know your privileges as well as your limitations as a cardholder.

Read More: Use Your Reward Credit Card to Get More from Your Spending

Which is the Best Rewards Credit Card that Suits You?

Typically the most popular kinds of reward credit cards are Cash back, Travel Returns, and Gas Returns. Credit card companies offer various reward programs and you may actually find credit cards that offer a variety of rewards.

Some people get confused in choosing reward credit cards particularly because there are so many available choices in the market. So which of the best rewards credit card you prefer? Consider these following points to ponder:

Don't focus on hype. Advertisements only highlight the best features of a reward credit card. But the actual disadvantages will almost always be obscured. You might get effortlessly persuaded by the promise to make large benefits. However, you should never subscribe to a reward credit card without performing a comprehensive analysis. The best way you can be assured regarding your own credit card option is by studying the fine print as well as doing comparison.

Rates and Fees. Credit cards that offer reward programs are expected to hold higher interest rates than non-reward cards. Nonetheless, this does not mean you should accept a high rate card. By evaluating reward cards, you should be able of finding one that has an affordable interest rate.

Read More: Which is the Best Rewards Credit Card that Suits You?

5 Credit Card Reward Tips to Remember

If you’re in search for a reward credit card, you’ll see that you have more than just a few choices. A lot of credit cards today offer some sort of a reward program to attract more customers. After all, who doesn’t want to get incentives in exchange for spending?

If you own a reward credit card or plan to get one, see to it that your chance to earn bonuses does not lead you to uncontrolled use. In order to really benefit from a reward credit card, a consumer must understand the process of earning redeeming points. Getting to know the exact rates and fees is just as important as well.

In this article, we have listed five essential tips that every reward cardholder must remember:

Don’t try to chase rewards. If you’re chasing after rewards, you will most likely fall into the trap of bad debt. Before charging a purchase or a bill to your account, consider carefully if you have the means to pay for those charges on time. Do not use the prospect of earning rewards as an excuse to spend more than what you really need. Owning a reward credit card should not be a passport to spend beyond your means. Keep in mind that if you will not be able to pay back your balance in full or on time, you will be charged with high interest rates and fees.

Understand the limits. Many reward credit cards impose limits on earning rewards. For instance, there may be a cap on the rewards you can earn in a month or in a year. Once you have reached that limit, you stop earning points regardless of how much you spend with your reward credit card. Even if you continue charging purchase, you will not be adding up points to your account anymore.

Don’t forget to “opt-in” when you need to. Different issuers of reward credit cards each have their own Terms and Conditions. The rules of the reward program may vary depending on the credit card you own. Sometimes, you may need to register to the rewards program to get maximum rebates and enjoy the perks. This is why it is very important to read the fine print before signing up for a credit card.

Be smart at redemption. When it comes to redeeming rewards, the rules may vary from one credit card to another as well. For instance, some reward credit cards offer several ways of redemption. You may have the option to exchange your points for cash, free travel, gift cards, merchandise or as credit in your account. It’s important to study your options well to make sure that you will get the best value.

Don’t let your points go to waste. Some credit card with rewards will allow you to carry over unused points for the next period but not all do. Does your reward credit card impose a limited period of redemption? If yes, then be sure to exchange your points before the expiration period or else they might be forfeited.

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How to Really Maximize Your Credit Card Rewards

Credit cards with rewards are enjoying huge popularity among consumers. Everybody wants to get rewarded but the question is, are you really getting the most out your own reward credit card? In truth, getting rewarded largely depends on how well you can manage your account. In this article, we present smart strategies that you can apply to maximize your chance of getting rewarded.

1. Choose the Right Rewards Cards

You need to start with the right type of reward credit card. So how do you know which one is right is for you? What kind of purchases would you usually charge to your credit card and how often would you use it? Generally, reward credit cards offer 1 point for every 1 dollar worth of purchase but the type of reward offered may vary from cash back, hotel discounts, airline miles, gas rebates, etc. Which reward program matches your personal spending and lifestyle?

2. Don’t Sign Up for Teaser Offers

Some issuers offer low or zero introductory rates as part of their marketing plan. Customers are often easily enticed by a low rate or higher reward points but these offers usually do not last for long. Perhaps you might be able to enjoy a low rate for at least six months but what happens after that? Will you be stuck with a high-rate reward credit card? Maybe you can enjoy 5% cash back for three months but when the promo period expires, you may find that the value of rewards has dropped down to only 1% or even less. When looking for a reward credit card, don’t immediately sign up for the teaser offer. Always consider the long term implications of your choice.

3. Use your reward credit card for items or bills you will pay in cash.

The best way to earn points is to charge purchases to your reward credit card. Why not use it to pay for necessities that you will pay in cash anyway? Use your reward credit cards to pay your groceries and medicines. Charge your monthly utilities to your reward credit card, too. However, if you plan to do this strategy, there is one thing you should not fail to do. It is to use your cash to pay down your credit card charges in full and on time.

4. Pay in full and on time.

There is no need to wait for your due date before submitting your payment. The earlier you can pay your credit card bills, the better it would be for you. Don’t be content with just the minimum payment. Always pay your monthly balance in full.

5. Take advantage of perks that your reward credit card offers.

Surprisingly, many reward cardholders are not taking full advantage of the perks and privileges that their credit card provides such as travel insurance, extended warranty, price protection guarantee and more. Why pay the extra cash to get a separate travel insurance or to extend a warranty when your reward credit card provides it for you for free? Review the terms and conditions of your credit card and get to know your privileges as a cardholder.

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Mistakes to Avoid for Reward Credit Cardholders

If you own a reward credit card, it is very important to take charge and not allow the prospect of earning rewards lead you to bad credit. Instead of letting your credit card take over, you should be the one to decide what types of purchases can be charged to your account. This may seem like an easy task but in reality, this can be a big challenge.

In fact, many reward credit cardholders are struggling to catch up with their bills primarily because of uncontrolled spending and poor credit card management. Let us talk about the most common mistakes reward cardholders make and how they can be avoided.

1. Paying Only the Minimum Due

It may be tempting to submit only the minimum monthly due payment instead of paying the balance in full. Some cardholders make this mistake even when they can afford to pay off their complete balance. Are you one of them too?

But if you own a credit card with reward, you have even more reason to pay your monthly balance in full. That’s because you are subjected to higher interest rates than non-reward cardholders. Imagine how much more you will end up paying, if you only pay the minimum within the next few months. The interest rate costs may well offset the value of rewards you earn.

2. Using Your Credit Card for Daily Purchases

There are two reasons why you should not charge daily purchases to your reward credit card. First, you are more likely to spend more than what your budget permits. Second, you are increasing the risk of maximizing or exceeding your limit, which can be damaging to your credit score.

Credit cards should never be used for unplanned purchases especially if you’re not sure if you will be able to pay your full balance on time. If you’re not careful, an item that you originally bought at $5 can turn to a $50 purchase because of the interest rate.

3. Don’t Use "Rewards"As An Excuse for Spending

It is true that the more you charge to your reward credit card, the more points you earn and the bigger rewards you can get. But getting truly rewarded depends on how much money you save using your reward credit card. If you’re paying high interest rates and late penalty fees, wouldn’t it defeat your purpose for using a reward credit card?

If you plan to use your credit card with rewards, don’t forget to consider your repayment obligations. “Can I pay my balance in full? Will I be able to pay on time?” These are the two most important questions you should think about before charging anything to your reward credit card.

4. Avoid Cash Advances

It’s best not to use your reward credit cards for cash advances. First of all, this particular transaction is automatically charged with interest rate. Even worse, the APR applicable to cash advances is often higher than the APR that applies on purchases or balance transfers. If you really need cash for an emergency, you might as well try to find other options.

Read More: Mistakes to Avoid for Reward Credit Cardholders

Related Rewards: chase credit cards

When A Reward Credit Card Becomes Unrewarding

Are you a reward credit cardholder? If yes, are you really getting the most out of your reward credit card? Or do you find yourself spending more on fees than getting rewarded? In reality, many owners of credit cards do not really get the benefits they thought their credit card with reward will bring them. Unfortunately, what seems like a great reward program at first glance turns out to be an unrewarding program later on.

What makes a reward credit card unrewarding? Consider the following points:

1. Rewards that you can’t enjoy.

Why get a credit card with Frequent Flier Miles rewards if you can’t enjoy the free travel anyways? Some travel rewards cardholders find it difficult to book flights because no seats are available for Frequent Flier Miles passengers especially during peak seasons. In the end, you may have to wait for the next available flight or watch as your points expire.

2. Expensive maintenance fees.

How much will it cost you to keep your account active? Some credit cards with rewards carry very high annual fees and finance charges so that the cardholder ends up with too many fees to pay. Think about it, if you have to pay $100 each year to continue using your reward credit card, are you truly rewarded or do you spend more on maintenance fees?

3. Reward Limits.

There are reward credit cards that impose restrictions. For instance, there might be a cap on the value of rewards you can earn in a month or in a year. Once you’ve reached the maximum worth of purchase, your points may stop accumulating regardless of how much more you spend with your reward credit card. Thus, even as you continue to shop with your credit card, you get nothing in return.

Some reward credit cards will not award you points until after you’ve made the required worth of purchase. For example, you may need to spend at least $500 or $1,000 before you start to earn points from your succeeding purchases.

4. Rewards that expire before you can redeem them.

Is there an expiration date? If there is, you could lose all your hard-earned points if you don’t redeem them on time. It’s best to avoid such credit cards and look for one that provides a reasonable length of time for you to be able redeem your points. You may also look for a credit card that will allow you to carry over unused points until you’ve collected enough to qualify for redemption.

5. Limited redemption options.

Does your credit card reward offer flexible options in redeeming rewards? For instance, if you don’t want to go on a trip or if it’s not possible for you to travel, will you have the option to exchange your miles points for cash back rather than have it forfeited?

Can you exchange your miles points for other types of rewards such as cash, gift check, merchandise, or as credit to your account? It’s best to find a reward credit card that offers flexible redemption options to be sure that you’ll enjoy the rewards you deserve.


Read More: When A Reward Credit Card Becomes Unrewarding

Related Rewards: chase credit cards

How to Get and Use the Rewards from your Reward Credit Card

Why are there so many card companies that issue reward credit cards? Well, one of the reasons for this is that card issuers keep on competing with banks and lending firms in getting bigger market share. They use unique credit card rewards to attract more consumers to apply for and use the plastic cards they offer.

Not only that. Card companies also use reward credit cards to retain the current set of consumers that they have. Through great reward programs, they can effectively reduce the chances of losing their cardholders to their competitors.

Common Credit Card Rewards
What are some of the usual rewards that you can get from reward credit cards? Well, some business establishments like hotel chains and airlines provide free hotel accommodations and free flights to their loyal patrons. Meanwhile, department stores and shops provide discounts, gift checks and freebies to reward credit cardholders.

read more: How to Get and Use the Rewards from your Reward Credit Card

related rewards: Cashback Reward Credit Cards

Questions Before Applying for a Reward Credit Cards

Many consumers find offers for reward credit cards very difficult to resist. After all, through these unique credit card programs, they can enjoy great merchandises and unique experiences provided by their grateful card issuers.

What are some of the most common types of credit card rewards? Well reward credit cardholders can expect to receive any of the following: free flight to their dream destinations, free hotel accommodations, cash-back incentives, gift items, shopping discounts and a whole lot more.

Still, despite the great incentives you can earn from using reward credit cards, this does not mean that you have to hastily apply for these credit card programs. Instead you need to take your time in finding the right card that will suit your needs as well as your lifestyle. To help you in this matter, we have listed several queries that you should ask customer service representatives of credit card firms before taking out the reward credit cards they offer.

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How to Avoid Reward Credit Card Dangers

Reward credit card can be exciting but there are also some dangers associated with using it. One of the danger of misusing it is leading you into the snare of bad credit. Check this article to find out the risks and how can you avoid them.

When used correctly, credit cards with rewards can truly be very rewarding. However, people cannot overlook the fact that there are risks associated with using reward credit cards. For those who are not conscious of their spending habits, having a reward credit card can lead to the trap of bad credit.

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