Are you willing to part with the money you are entitled to?
the main points
- The upside to using credit cards is getting rewards.
- If you don’t manage your rewards well, you could end up throwing money away.
Lots of people use it credit cards To pay for purchases because doing so is easier than holding down the ATM and paying with cash. But the big benefits of using credit cards accrue RewardsWhether it’s air miles, hotel stays, or a good old cashback.
But some consumers lose out on credit card rewards for not reading — or understanding — the finer details. In a recent Wells Fargo report, 13% of rewards card consumers don’t understand how their rewards programs work. And if you’re in that boat, it’s time to learn – before you end up throwing free money away.
Do you know how your rewards program works?
Credit card rewards programs are not necessarily cookie cutters. In some cases, your rewards may come in the form of a certificate that is emailed to you for redemption. In other cases, you may have to log into your credit card account, choose a specific reward, and wait for it to arrive.
But either way, it’s important to know how rewards programs work for your credit cards. If you don’t, you may miss out on perks that could benefit you financially.
Let’s say one of your credit cards offers you an annual credit to a specific retailer that you must redeem by a certain date. If you let this date pass you by, you will forfeit the value of that reward.
Likewise, many credit cards have revolving reward categories that allow you to get more cashback on your purchases. For example, one of your cards might offer additional cash back at the pump during the first quarter of the year, additional cashback at department stores during the second quarter of the year, additional cashback at restaurants during the third quarter of the year, and additional cashback at the supermarket during the fourth of the year. If you don’t pay attention to these categories, you might swipe a different card – and miss out on extra cash in your pocket.
Aim for simplicity
It is true that some credit cards have rewards programs that are more difficult to follow than others. So, if you’d rather not risk confusion and lose out on rewards, then go the simple route. Find a credit card whose rewards program is great and straightforward — for example, 3% cashback on gas top ups year-round, 2% cashback at restaurants, and 1% cashback on all other purchases.
Or, you can choose a card that offers 1.5% cashback on all purchases so you don’t even have to commit to remembering which categories bring you the most money. Doing so could mean giving up a little extra cash when filling up your car. But it may also be a better option for you because allocating 1.5% of memory is very easy.
Credit card rewards can save you a lot of money and more money in your pocket. And you don’t want to miss out on these perks due to a lack of understanding.
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