Managing Reward Credit Card’s Point Caps and Expiration Dates

One of the trickiest things about reward credit cards are point caps and expiration dates. Not knowing and understanding how your rewards card caps and expires points will cause you to miss out on precious rewards. The high interest rates and annual fees on rewards credit cards aren’t worth it if you don’t redeem your rewards because they expired. Read on to find out how to make the most of your rewards even if there’s a cap on your earnings.

What Are Reward Caps?

A rewards ‘cap’ is the maximum amount of rewards you can earn in a certain period of time. Your credit card might cap rewards monthly, annually, or a combination of both. The BP-Citibank MasterCard, for example, only gives rewards on the first $60,000 in purchases each year. If you sign up for this card and end up charging $70,000, you won’t receive any reward on the last $10,000 you charge.

What Are Reward Expiration Dates?

If your rewards credit card has an expiration date on your rewards, it means you must use your rewards by that date or you’ll forfeit them. For example, the terms and conditions of your rewards credit card might state rewards expire 36 months from the month in which they were accumulated. So, if you accumulated 300 points in May 2009, you’d have until May 2012 to use those points before they expired.

Tiered Rewards Rates

Some credit cards have different levels of rewards you can earn. You might receive one interest rate within a certain spending range and a different interest rate in the next spending range. In the case of the Citibank Cash Back Visa, you’d earn 0.5% on balances up to $1,999; 1% on balances between $2,000 and $3,999; 2% between $4,000 and $5,999; and 4% on balances greater than $6,000.

With this type of credit card, you gain more rewards points when you charge more money on your credit card. There are some credit cards that do the reverse and give higher interest rates on the first dollars charged with the credit card. Using the BP-Citibank Visa as an example again, cardholders earn 5% cash back on the first $300 purchased at a BP station (monthly) and just 0.5% on purchases after that.

Tips for Making the Most of Caps and Expiration Dates on Rewards

Read the terms and conditions before you sign up. Before you even apply for a rewards credit card, make sure you know and understand if and how that card will cap your reward points. Not only that, read to find out if your rewards points will expire.

Ideally, you want a card that doesn’t cap your points and doesn’t expire them. This might not be the case with the card you ultimately sign up for, but that isn’t necessarily a bad thing. The key is making sure you manage your spending so you get the maximum rewards possible. Use a different rewards credit card once you reach the cap.

Having multiple rewards credit cards in your wallet can be beneficial, especially when one or more of them has a cap on the reward points you can earn. When you max out your rewards on one card, you can start using another to continue earning rewards. You can maximize your rewards benefit even further by signing up for cards that allow you to convert points to a common type.

Know your Expiration Dates

Many rewards credit card companies print the expiration date for rewards on your billing statement. Pay attention to your statement each month to stay aware of points that may be expiring soon. If your statement doesn’t let you know you have rewards expiring, keep track of them on your own. Or, call your customer service representative to find out how you can be automatically alerted when your rewards are expiring. Adjust your spending to fit tiered reward rates. If your credit card has a tiered rewards program, adjust your spending to match it, as long as you can manage the payments. You’ll have to charge more on a card that rewards you on the higher end of dollars purchased (like the Citibank Cash Back Visa does).

You can maximize your spending by putting all your purchases on your credit cards (even groceries and gas). Make sure you put the cash aside so you can pay your balance in full when the due date comes. Visit our reward point capping and expiry details to find out more specific details about reward credit card’s programs.

Note: Credit card features were accurate at the publishing of this article and are subject to change.

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