18 Tips on Using a Credit Card Rewards Program

If you are going to open up a credit card, my suggestion is to find one that offers a cash back or rebate program. While most financial experts tell you to stay clear of these type of accounts, I believe a credit card rewards program can be used to your advantage. Anyone who is disciplined with their money should have no problem leveraging these products and using them to generate a little extra cash.

My wife and I have been taking advantage of more than one credit card rewards program for years. We typically redeem over $300 per year in gift cards and cash. Using credit with high interest rates may not be for everyone, but those who are able to follow the tips below can take advantage and start taking some of that hard earned income back.

Here are 18 tips to help you get started earning back a little cash on your expenses.

1. Pay Off Your Balance – The most important tip is to pay off your entire balance each month. If you cannot afford to pay off your balance, then there is absolutely no reason to have a credit card.
2. No Annual Fee – Try and select a credit card that has no annual fee. There is no reason to open an account where you end up paying more in annual fees to maintain your account than you rack up in savings.
3. Pay Online – Try to pay your bill online if possible. Paying online is quicker and you will save money on annoying postage every month.
4. Check Your Monthly Statements – Always check your monthly statements, whether it be online or by mail. This only takes a few minutes to do each month and could save you money. Checking your statements is another reminder of what you are spending your money on.
5. Track Each Expenditure on Paper – It helps to stick with your budget when you keep track of every expenditure you make on paper. At first this may seem time consuming, but will really help you stay on budget every month. Be sure to balance your monthly statement against your notes to ensure you are not being overcharged.
6. Automate Your Expenses – Find out which of your recurring monthly expenses can be paid by credit card. For example, you may be able to automate your monthly cell phone bill to be paid through your credit card. This helps you avoid any late payments or fees from your cell phone provider while earning more cash back on your credit card.
7. Maximize Your Monthly Rewards – Check with your credit card rewards program to see if it comes with monthly restrictions. If you have more than one card, try to maximize your potential earnings by splitting up expenses appropriately each month.
8. Avoid Frivolous Expenses – Never purchase items on your credit card that you do not need or otherwise would not have bought. Purchasing frivolous items on credit is a bad financial habit that can really hurt your finances in the long run.
9. Setup a Payment Reminder – If you go paperless, it may help to setup a monthly reminder to pay your bill. It is vital to avoid any late fees or extra charges. Pick a method of reminding yourself that works best for you.
10. Look for Bonus Rewards – Some credit cards will give you additional cash back bonus for using your card during certain dates. For example, my Discover Open Roads card offers additional rewards for choosing certain gift cards compared to receiving a cash payment.
11. Limit Your Number of Cards – Don’t sign up for every credit card reward program that you find. Many financial experts state that a person should have between 2 to 6 credit cards. Opening up more than 6 credit cards could have a negative impact on your credit score.
12. Don’t Let Your Rewards Expire – Every credit card rewards program will likely come with an expiration date to redeem your points. Be sure that you know when your points are set to expire and remember to redeem them beforehand.
13. Shred Convenience Checks – Be sure to shred any convenience checks sent to you in the mail by your credit card company. It is important to avoid cashing any of these checks when you get them, as you will be charged extra interest for them.
14. Charge as Many Expenses as Possible – Most financial experts will disagree with this tip, however I like to charge every expense that I can. Since I am tracking all of my expenditures on my credit cards, I prefer to charge everything. Just make sure you don’t get charged an extra fee at a store for not having a minimum amount (i.e. $10).
15. Use More Points for Higher Rewards – Depending on the amount of time you have to redeem your points, holding onto them can pay off. Some credit card programs may stagger their rewards by offering better returns for the more points that are redeemed.
16. Look for Specialty Cards – Several credit card rewards programs promote certain types of expenses. One of the more popular specialty type of accounts are gas credit cards. These cards typically pay a higher reward for filling up your car with gas or automobile expenses compared to say groceries.
17. Make Online Purchases – If you do most of your shopping online, you may be able to earn extra cash back through your credit card. Many of these programs offer higher rebates from online shopping. Just make sure that the purchases you are making fall into your budget.
18. Combine with Online Rewards – If are making online purchases with your rewards credit cards, look at leveraging additional rebates through 3rd party sites. Swagbucks for example has its own program that can earn additional rewards outside of your credit card.

Signing up for a credit card rewards program can be an excellent way to build your credit score while earning a little cash back at the same time. I know that I enjoy redeeming my points every year for a couple hundred extra dollars in gift cards. Just remember to keep your spending aligned with your monthly budget, no matter what form of payment you decided to make.

Related posts:

1. 5 Quick Tips on Maximizing Credit Card Rewards
2. Adding a Discover Credit Card Income Stream
3. Save Money by Reviewing Your Credit Card Statements
4. Best Gas Credit Cards
5. What Can Raise Your Credit Score? Try Using Credit Cards!

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