Online shopping offers almost unbeatable deals and give customers an easy way to maximize their rewards. For example, Discover cardholders who shop through the ShopDiscover portal, which features such retailers as Best Buy, Kohl’s, and the Apple Store, can earn up to 20% Â in cash back on their purchases.
Make Smart Credit Choices
Even with all the perks and savings, keep in mind that a rewards credit card is still a credit card. That means sticking to the tried-and-true rule of paying off your entire balance, or as much of it as possible, every month. Use your rewards card wisely. Remember: if you keep a balance, you’re really funding your own rewards program. Most credit card issuers fund rewards programs by charging higher interest rates on rewards cards. So keeping a revolving balance won’t help you garner the most out of their rewards, plus you’re usually paying a higher interest rate. Whatever you’re earning in points, miles or cash back, you’re likely giving it right back to the issuer in interest.
Don’t pay late and never miss a payment. Missed payments often results in forfeiting the rewards you have earned. Another drawback is long periods of inactivity on your card; you may lose the rewards, or cash back on the credit card itself. Redeem your rewards periodically instead of hoarding them so you’ll get the full value without the risk of losing them. To find out how much bang you’re getting for your rewards, check out your year-end summary that issuers provide; by dividing the rewards you earned by how much you spent, to see if you’re coming out ahead. If you don’t like the results, consider switching credit cards.
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