Is paying the monthly bill on my credit card a smart choice to building rewards points? The question here is not whether or not to pay your bill. You should always pay your credit card bill on time. Doing so keeps your costs low and ensures your lender is willing to keep offering you rewards points. Rather, the question is how to maximize the use of a reward card. Most consumers will find that this is one of the best ways for you to maximize your ability to get cash back or free airline tickets.
The Reward Card Reward
A reward card gives you something back for using your credit card. It is a type of loyalty program where the lender's goal is to encourage you to use the card as much as possible. According to the 2011 Forecast of US Consumer Loyalty Program Points Value, an estimated $48 billion worth of loyalty points is dispensed each year. One third of that is never cashed in. What does this mean to you?
- If you are going to earn reward points, be sure you redeem them. This way, you are actually getting the benefit these cards offer.
- Note that if you are not going to use the rewards points, it may be best to look for a credit card with a lower interest rate instead. It could save you a substantial amount of money.
- If you do plan to use these cards, it is important to know the best way to pay bills.
Rewards cards can be a good thing, if you know how to use these card services in the best way.
What Is The Best Way To Pay Bills?
For those who plan to use this type of offer, the first step is to learn about the offer. Read through your card services terms of service and find out what the limitations, restrictions and methods of earning these rewards points is. Then, consider the following.
- Each month, use your credit card for your purchases, but only up to the amount that you can pay off in full each month.
- Within the grace period, which is the time you have to repay your debt without incurring any finance charge, pay off the debt in full.
- Do not carry a balance month to month. This way, you earn the reward points you want, but your monthly bill remains low.
This is the best way to pay bills because you pay your monthly bill on time and you avoid having to pay expensive finance charges. Since rewards cards often have a much higher rate of interest, this can keep the borrowing inexpensive. However, you still get to earn the rewards points you want to earn. Then, spend them!
