A Personal Finance Blog for Malaysian: 7 Ways to Maximize Your Credit Card’s Benefits

Sunday, March 17, 2013

7 Ways to Maximize Your Credit Card’s Benefits

If you are looking through all of the different credit card options that are available, you will likely see that a lot of come with benefits or rewards. These benefits mean almost nothing if you don't know how to utilize them though.  How can you make the best of them? Read on to find out!

Watching Your Credit
Never assume that you should put everything on the credit card just because you are going to receive points. Take this example as a cautionary tale: Let's say that you earn $50 in rewards for every $5,000 you spend. However, if you are unable to pay off that amount, then you have not earned $50, you'll spend much more in interest!

Understanding the Points
Before you even enroll in such a credit card program, you should be sure you understand how the points work and if they are worth it. All credit cards are going to have different systems. However, if it is going to take you $10,000 worth of expenditures to even earn any sort of reward, it is probably not worth it.

The Interest Rates
As you browse through all of the options, make sure you have a firm understanding of the interest rates. If you don't, you could rack up a ton of debt just to get points. Despite these points, you will be paying back so much with the interest rates.

Track Your Points
Once your points are available, you likely want to use them right away. Therefore, you should keep track of all your points. Most credit cards provide you with an online account, so you are able to quickly access this information., so remember this when choosing between two programs. Have an accurate idea of what you level you are at.

Love the Rewards
Let's say that you select a credit card that provides free air travel miles; but you dislike traveling by plane, and you do not think you are going to ever fly again. It wouldn't be practical for you to have this card, because you are not going to use the rewards anyway! Find rewards you know you'll use and enjoy.

Watch Time Limits
The rewards on your credit card might not last forever, so it's important to have an idea of how long you have before the points expire. Obviously, you want to use the points before they sail away to credit-card-benefit heaven. Many cards also require that you make at least one purchase a month, or you'll lose everything you've earned up to that point.

Pay Bills in Full
When you pay your bills in full, you are creating a much more beneficial situation for yourself. You can  ALWAYS pay off bills right away, and if they don't let you, then get a new card ASAP. Doing so will allow you to get those benefits and points. 

Credit card benefits really are excellent, because they can provide you with airline miles, free stays at hotels and cash. In order to properly use these benefits (as opposed to them overtaking you), it is advisable to follow the tips and suggestions listed above. 

Bathilda Haggarty writes about her career in finance. Her best work is about earning a masters in finance online.