When it comes to credit cards, not everyone is worry-free.
Even those who own reward credit cards often find
themselves in a difficult situation. Instead of enjoying
incentives and savings from their "reward credit cards",
some people are having problem keeping up with their bills
and not getting any reward at all. Why?
One major reason is that reward credit cards come with very
high interest rates. Some people spend more on their reward
credit card just for the purpose of collecting points
without paying attention to their monthly balances. As a
result, they have to put off their monthly payment and get
charged with a high interest.
It is easy to lose control of your spending if you don't
have a sense of obligation and self-discipline. One thing
to remember about reward credit cards is that the rewards
should come as a bonus, a perk, an incentive. It should not
be the primary reason that drives you to spend more on your
credit card than what you really can afford.
When using your reward credit card, you still need to be
aware that you'll need to pay back your purchases at the
end of each month. Or else, you will be charged with an
expensive interest rate which puts additional burden on
your budget. Furthermore, if you often incur unpaid balance
in your account, you can lose your chance of redeeming your
rewards. Yes, credit card issuers have the right to change,
stop or disqualify you from claiming rewards if you violate
stipulations in the agreement. And some reward credit cards
require their members to settle their monthly accounts to
qualify for rewards. Thus, be sure that the expenses you
make in your account are within your means, and that you'll
be able to pay it back on or before the due date of payment.
Another way to use your reward credit card smartly is by
taking advantage of the 0% introductory offers. If your
reward credit card offers a 0% APR on balance transfers,
this is your chance to transfer over your high interest
balances from other credit cards and pay them off while
there's no interest charged. This way, you can focus on
paying the actual amount you owe without worrying about
interest costs. Just make sure that you'll be able to pay
off all your balances before the 0% introductory period
ends.
Of course, you still need to collect points to earn
rewards. How can you earn more points without necessarily
going beyond your budget? This is by choosing reward credit
cards that matches your spending. For instance, cash back
reward credit cards give points for all types of purchases.
If you have a cash back reward card, use it to pay your
monthly utilities such as telephone bills, cable,
electricity, mortgage and other monthly that you have the
obligation to pay one way or the other. If you put these
bills together, you can earn more points in your account
while making sure that you pay off all your duties
accordingly.
Understand the terms of your reward credit card carefully.
There might be some options about earning points that you
might have missed or there might be some restrictions on
collecting or redeeming rewards that you should be aware
of. In any case, it would be to your advantage if you know
and understand correctly all terms included in the credit
card agreement you signed. Even if you've had your reward
credit card for some time and you think you know
everything, it's still a good idea to review the terms and
conditions of your card.
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Ann Wilson is the head writer of RewardCreditCardSite.com.
This resource provides consumers with valuable reviews and
information on the best credit card reward programs. Its
main objective is to help people to take advantage of
credit card rewards and start earning reward points. Visit
http://www.rewardcreditcardsite.com for more information.
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