Utilizing Credit Card Rewards Responsibly
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Utilizing Credit Card Rewards Responsibly

Posted on Thursday, December 22nd, 2011 at 11:28 am
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Credit card companies are very interested in making their credit cards seem enticing to consumers.  This is why they create reward programs.  They hope that you will choose to spend more money than you had planned on spending, in order to receive those rewards.  If you are smart, then you can utilize credit card reward programs responsibly, and to your advantage.

Some credit card rewards give you a certain number of points every time you make a purchase with that card.  One example of this is the Amazon Visa card.  Every time you buy something with that card, you earn a certain number of points.  If you buy something from Amazon.com, then you get more points than you would if you bought the same item somewhere else.

Those points add up.  You can use those points as Amazon Credit.  In other words, your points almost become money that you can use to buy something else from Amazon.com.  Or, you can redeem those points through the Amazon card website.  When you have accumulated enough points, they will mail you a check that you can take to the bank and cash.  There are also other items that you can spend your points on.

This type of rewards program is designed to encourage you to make more purchases.  It also is designed to influence you to make those purchases from Amazon.com.

In order to use this rewards program responsibly, you need to think before you buy.  Are you buying that item because it is something that you need?  Or, are you buying it just so you can get more points?  Another way to use this rewards program responsibly is to make sure that you pay off your entire balance each time you get a bill.  Don’t let those purchases generate an interest rate for you to pay off.

Other rewards programs give you points only when you buy certain types of items during a certain period of time.  One example of this is the Discover Card Cashback rewards program.  From January through March of 2012, you can earn a 5% Cashback bonus when you buy gas, or purchase tickets to a museum or movie theater with your Discover card.

In April of 2012, you will not be able to earn the Cashback reward for those types of purchases anymore.  Instead, you can now earn the Cashback reward when you use your Discover card to make purchases at restaurants and movie theaters.  The types of purchases that will allow you to earn the Cashback reward will change as the year goes on.

In order to use this type of rewards program responsibly, you have to make sure that you are constantly aware of exactly what kinds of purchases will generate a Cashback reward.  Don’t use the card to make purchases that won’t earn the reward.  Again, it is still a good idea to pay off your entire balance every time you receive a credit card bill, so you won’t generate any interest payments.



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