Personal finance tips and advice on money and investing to increase your financial intelligence and welfare

Cashing In on Reward Points and Miles

Who doesn’t want to save a buck or earn a little more? Even the wealthy use coupons and take advantage of retail discounts. In tough economic times, even more effort is put into balancing the financial scale of income and expenses. And in a recession, people who wouldn’t normally use a credit card will find it necessary, and those who have relied upon plastic will use one even more. The value of current incentives is at an all time high and a great time to apply for a new card and reap the benefit of great bonus offers. Handled with care, a credit card has benefits that include rewards that can add up to a tidy sum.

Financial institutions market their credit cards in a variety of ways through direct mail, Internet and television advertising. Cash back rewards are a big selling point. But the most beneficial offers are those that include a sign-up bonus, points or miles on all purchases, along with zero percent interest on purchases and balance transfers.

Sign-up Bonuses

The biggest rewards go to the consumers with the best credit. If you have an excellent credit score and pay your bills on time, your chance of being approved for a credit card with a generous sign-on bonus is quite good. The value and terms of a sign-up bonus depend on the issuer and the level of the card you qualify for – gold, platinum, and the top of the heap – the black card. Bonus rewards come in the form of a cash rebate, statement credit, travel perks and merchandise with current values of as much as a $100 cash rebate, $250 in gift cards and $500 in travel rewards. Keep in mind that many of these offers require a minimum purchase be made within 3 months to qualify for the bonus, a minimum that is easily met.

Every Day Point/Mile Programs

In addition to the sign-on bonuses, reward cards give consumers the opportunity to earn more. You can choose to either earn points or miles that, on average, give 2% back on all purchases you make with the card. Increase rewards by shopping online through the credit card’s website. Look for special promotions for purchasing from specific categories to increase your reward points/miles even further.

Zero Percent Benefits

While it’s a great feeling to earn $100 for just using a new credit card, it’s even more exciting to know that you paid no interest to earn it. If the zero percent includes balance transfers, you can get out from under the burden of other account balances that carry heavy, monthly interest charges.

To make the most of a new reward card, choose one that offers both a sign-on bonus and points or miles. A good example is the Chase Freedom® Visa Card which gives a $200 cash back bonus and savings of 5% on specific categories that change quarterly. If you don’t qualify for an offer that gives double rewards, look for one that best fits the type of purchases you make. For instance, anyone who does a lot of traveling will reap the most rewards by using a miles reward card; long distance drivers might benefit most when using a gas reward card.

How to Redeem Mile/Points

Read the details and fine print to be sure you’re complying with the terms and conditions and that no restrictions apply. Contact the customer service representative by phone or redeem your points/miles online. One smart way to help in times of financial uncertainty is using cash back bonuses to help pay off outstanding credit card debt. If you’re able to pay off the balance every month, refrain from using your rewards until you’ve accumulated enough to enjoy a well-deserved vacation or buy that big-ticket item you’ve always wanted.

It’s never a good idea to apply for too many credit cards over a short period of time. Once you are approved for a new card, don’t rush to close your old account. By keeping it open, even if you never use it again, creditors and the reporting agencies will see the length of your credit history, which will help raise your credit score.

About the Author: Noreen Ruth is a regular contributor to numerous financial-related blogs and websites. She specializes in credit and debt-related issues and enjoys educating consumers about the latest rules and regulations, as well as ways to build, improve and maintain good credit. Visit www.Asapcreditcard.com for additional information on reward credit cards or follow her on the ASAP Credit Card Blog to stay up-to with the latest credit card news, reviews and more.