3 ways of Savvy Rewards Cardholders

With rewards debit card on the decline and rewards credit cards offer greater incentives for enrollment and better rewards, many owners plan to redeem these rewards rewards credit cards to finance the summer holidays. According to the Capital One Rewards Barometer, a quarterly survey of U.S. consumers, half of respondents plan to pay a summer trip at least a portion of their travel expenses using rewards, compared with 42 percent of the last year.
Although airlines tighten their belts and increase costs, some credit card holders carriers now have additional benefits. "The airlines have started charging for more things, but with an airline rewards credit card, you can do things like your first bag and priority boarding," says Erik Larson, president and founder of NextAdvisor.com, offering consumer-oriented research on credit cards and other products.
However, the credit card rewards often have higher interest rates and rates of traditional cards, so do not make financial sense for everyone. Here's a look at how smart holders earn rewards points or miles, without accumulating debt.
1. Choosing the right card for your needs. Before signing up for a rewards card, analyze your spending habits and see where and how you use credit. Are you a frequent traveler to a given airline because you live in a center? Or do you tend to spend more on food and gasoline? Choose your card accordingly. "If you sign up for really big bonus points with an airline, may not be the best card in the long run if you use this company," says Amber Stubbs, Senior Editor CardRatings card comparison site credit. com.
Also know the costs associated with the card. Airline Rewards cards are more likely to pay an annual fee because their owners tend to be loyal. "If the card is used often, the annual rate is usually not a problem because you can get much more of it as you go," said Stubbs. "If you are a light user, you must do the math. Often you have to spend thousands of dollars before the balance."
Also, the complexity of the points or rewards redemption process is. If in doubt, Larson recommend getting a card that offers cash, because "it is very clear what you get for what you spend. With other cards, it's a little more difficult to understand."
Two. Pay off the balance each month. Apart from choosing the wrong card for your needs, the biggest mistake benefits cardholders can do is get a balance. According to Larson, the APR would be of 2-4 points lower in non-rewards card, so a balance from one card Reward expenses.
John Ulzheimer, president of consumer education at SmartCredit.com, compare rewards programs for a buffet. "There is a person who eats a lot and a lot of people who are not going to eat almost $ 7.99 of food, and these people balancing big eaters" he said. If you carry a balance on a rewards card, you are essentially subsidizing its own rewards and awards from other owners.
Three. Avoid running awards. For some consumers, rewards cards create an excuse to spend more on the search for miles or points. This can lead to financial problems if you are not able to pay the balance. Stubbs suggests that the processing of your credit card as a bank account. "Look who it is about," he said. "If more than half of your budget and what is in the middle of the month, you know that you need to control spending. When you are about to check out, ask yourself:" I would be happy to put in my debit card? "If the answer is no, then you may want to rethink the purchase.