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Travel rewards are what's hot now in the credit card reward program world. They allow frequent fliers to build up the points, using the credit card of their choice airline company. Or they can even use their regular Visa, MasterCard, American Express, or other credit card to build up points on every purchase and redeem them for exotic travel destinations.
Amazingly, even travel Web sites, like Orbitz and Travelocity, are getting into the mix, according to credit card experts. Such choices in the credit card travel arena really let you get the most miles out of your airline reward credit card.
The benefits for these specialized cards, however, only come if you are a dedicated customer. For example, if you tend to fly whatever airline has the cheaper ticket, you're better off getting an all-around airline reward card, such as your typical Visa or MasterCard, which will allow you to redeem your points for practically any airline, or other travel prizes. This holds true if you tend to shop at many different Web sites for airline tickets, and jump at the cheapest chance.
On the other hand, if you tend to shop at the same Web site—say, Expedia—or if you fly the same airline for business over and over, you may be better off if you get their special credit card. The reason is simple: these cards give special benefits to people who stay loyal to them. For instance, one card may give three reward points for every dollar that you spend at their Web site, but if you shop at another Web site, or use the card for any other purpose, you only earn one point per dollar.
This premise is nothing new, though. Airline reward cards have been around since the 1980s that have been linked to specific airplane companies. These cards are pretty old-hat and simple to understand. The money you spend on them goes directly to adding points to your particular frequent flyer program for that given airline company. What is also a bonus to these cards—and explains why they have lasted so long and still are a popular favorite with frequent fliers—is that they also give your travel points still for every mile that you fly for them. So in that regard, it's like getting double credit for every flight that you purchase. You earn miles for the cost of the flight, and the length of it in miles.
Rewards credit cards are a popular choice among consumers today. Many are drawn to the idea of applying for a card that sends out rewards every time a purchase is made. And there are now more types of rewards to choose from than ever before, from cash back to airline tickets, gas rebates, and even merchandise.
Experts warn, however, that many cardholders don't take full advantage of this type of card. Consumers often sign up, and then forget to redeem the points they've accrued for rewards. To make sure you're getting the most out of your rewards credit card, read through the following steps. They'll help you earn the most rewards possible.
1. Check your Expenses
Before you get a rewards credit card, try reviewing the expenses that you have each month. If you need to, keep track of what you spend for an entire month. Then look back and take note of where your money went.
2. Find the Right Match
Once you know what some of your regular expenses are, you can think about which type of rewards card will work best for you. If you are a frequent traveler, you might consider signing up for a card that offers airline rewards. If you spend a good amount of money on gas and groceries each month, try looking for a card that gives rewards in these areas.
You may find that you just want some cash back. If that's the case, look for a card that you can use on a regular basis each month. Some experts estimate that the average household spends about $1800 in bills each month. You might consider paying for some of these, such as utilities or groceries, with the credit card. Pay off the balance each month, and enjoy the cash back you'll receive.
3. Sift through the Details
Once you've found a card that looks like a good fit, look through the terms and conditions listed. Find out what the annual percentage rate is, and check for the fees that come with the card. You'll want to make sure the costs of the card do not outweigh the rewards you will be receiving.
Also check for caps and limitations on rewards. Some companies include expiration dates that the rewards must be redeemed by. Airline rewards programs might list a limit on the number of miles you can earn each year, or have blackout dates. All of these details are important to know before you apply for a credit card.
4. Stay Focused
Check your monthly statements to see how many points you have accumulated. Keep track of the points or miles you have earned, and redeem them for rewards as soon as possible. Stay on top of the account, and you can expect to earn a significant amount of rewards each year from the card.
To make a rewards card work for you, get a firm grasp on your monthly expenses. Then apply for a card that will fit your lifestyle. Pay off the balance each month, and redeem your points or miles often. In doing so, you'll reap in plenty of rewards.