Reward Credit Cards - Do’s and Don’ts

My wife pointed out a great article in the August 2006 issue of Parent’s Magazine about how to “Cash in on Credit Cards” with reward cards. I’m glad she pointed it out because I never read that magazine personally (it’s probably more of a Mom thing). The article points out several recommended reward credit cards in which I’ll get to in another article. In this article I want to share with some of their recommended reward card do’s and don’ts…

1. DON’T be tricked by a credit card that uses the phrase “up to” in its advertising. An offer “up to” 3 or 4% back, for example, may give you that rate only after you charge a certain amount each month or year (and sometimes only if you carry a balance).

2. DO beware of credit rewards that you can’t collect on right away because banks could change programs or shut them down with little notice. Look for a reward credit card that sends rewards monthly or quarterly and is a well-known company such as CitiBank.

3. DON’T go credit card crazy. It can be tempting to sign up for a whole bunch of different credit reward cards to try and maximize your benefits. But then you run the risk of losing control of your spending and / or hurting your credit rating by opening or closing to many cards.

4. DO remember that you should always pay your credit card bills promptly to avoid forfeiting your rewards (yea, that would stink) or being charged a hefty late fee. One solution would be to sign-up for automatic online bill paying.

As mentioned, I’ll be writing another article recommending some great reward card choices next week. Banks make money every time you swipe their plastic, shouldnt you? :)

Sources: Josh Garskof, Parents Magazine Aug 2006