We all love something for nothing, and credit cards can offer just this if you are careful about your spending.
Did you know you can get reward points for browsing the internet using a browser or for using your credit card for everyday purchases. Better yet, the increased competition among credit card companies has them battling for your business offering more rewards than ever.
How to rack up reward points
Although credit card reward programs are a great way to earn rewards, not everyone knows how to get the most from these programs. To get the most from the available credit card reward programs consider the following;
- Annual fees. Always look at a card’s annual fees. Do not let attractive reward programs trick you into taking cards with high annual fees. The high annual fees might eat up all your rewards. Always compare the expected rewards with the annual fees.
- Spending habits. Your spending habits are an important factor to consider when selecting a credit card rewards program. Different reward programs favour people of different spending levels. Start by estimating how much you spend per month, and then pick the right card.
- Compare different reward programs. Different credit card reward programs have different rates of earning points. For instance, one card could earn you three per dollar spent while another earns you one point per dollar spent.
- Redemption options. In addition to the rates of earning points, compare the points needed to redeem a reward. Different programs will require you to have a set number of points to redeem a $100 reward. For instance, one program could require you to have 10,000 points to redeem a $100 reward while another requires you to have 20,000 points to redeem the same reward.
- Consider your lifestyle. Before joining a credit card reward program, check if the rewards match your lifestyle. Different cards offer different rewards. If you are interested in shopping, go with a program that offers shopping rewards. If you’re a frequent flyer, opt for one that is linked to a frequent flyer program.
- Monitor your points balance. To avoid cases of expired points, regularly check your points balance. You’d rather redeem a reward you do not like than watch your hard-earned points expire.
- Pay off balances in time. To avoid high interest rates, which will reduce the value of your rewards, pay off monthly balances on time and in full.
- Know your card’s bonus partners. By getting familiar with your card’s bonus partners, you increase your chances of racking up more rewards.
How to rack up speedy reward points
Although using your credit card to pay for your purchases only is enough to help you rack up reward points, you require some creative ways to speed up the process.
The following are some creative ways you can employ to speed up the process of racking up credit card reward points.
- Sign up for up to four cards a year. One of the easiest tricks to speed up the process is by signing up to four credit cards per year, without any impact to your credit history. But if you’re planning to obtain a big loan soon, like a home loan, it’s good to refrain from this tip. This method lets you enjoy the attractive sign-up bonuses offered by most credit card companies. You sign up for the four cards and cancel them once the rewards have been issued.
- Lend money to a foreigner. Using an international microlending platform like kiva.org, you can use a credit card to lend money to a screened foreigner. Although Kiva claims some interest rate, the rewards you get will in most cases surpass the interest.
- Use Paypal when shopping. When you your credit card, you won’t be charged a cash advance fee for sending money for services, goods and eBay items. PayPal will only charge your credit card for the transaction amount. Find out more about using Paypal here.
- Segregate your cards. Different credit cards give you bonus points for specific payments. For instance, one card will give you extra points for fuelling while another will give extra points for travel. Know what card gives which bonuses and then use the right card to make the right payment.
- Pay your employees using a credit card. Ask your gateman, nanny, gardener and house cleaner if you can pay them through Amazon payments, Venmo, or PayPal.
- Do not shop from a store’s website. Not all online stores are listed at the shopping portal of the airline, bank or hotel associated with your card. To make ensure you get reward points, use shopping portals such as PayPal instead of store websites.
How to control your credit card spending
Although paying with your credit card is a great way to rack up rewards, care should be taken to avoid cases of overspending. The following are three tips to help you control your credit card spending while still racking up reward points;
- Make a budget. The main reason most people find themselves in credit crisis is failure to plan. You do not have to be a finance graduate to be able to create a personal budget. Creating a budget is as simple as forecasting the payments you will make during the month or week and the source of money to finance the payments. By having a clear plan of what payments you will make using your credit card, you gain full control of your credit card spending.
- Find the right card. Find a credit card that fits your spending habits and offers rewards that fit your lifestyle. After getting the right card, use it to make all your payments. By using the card to make all your payments, you get to benefit from increased reward points, which can be redeemed for rewards.
- Pay off your credit card balance in full. Failure to pay off your monthly balances in full and on time can leave you in a financial black hole and you’re not rewarded anymore points. The high interest rates charged by most credit card companies will not only eat up any rewards earned, but also affect your credit score adversely.
Follow these tips to help you make the most from credit card reward programs, and have control over your credit card spending.