Tag Archives: tips

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Maximise Rewards on Your Credit Cards

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Credit card rewards are, at the very least, extremely nice to have. They can also give a genuine boost to your finances or be that factor that makes you choose one provider over another. But you don’t have to just passively accept the rewards as they come. With a little extra effort, you can maximise the rewards in order to draw the very greatest benefits from your card.

Combining With Separate Offers

Get a little extra reward in the first instance by looking at other offers and types of reward that you can combine with your card. For example, it may be possible to make your application through a cashback website. This will give you cash upon your application being accepted, above and separate from whatever rewards may come with the card. It is possible there may also be special offers for taking out a credit card with the bank you already hold a current or savings account with.

Making the Most of Cashback on Spending

Many cards offer rewards in the form of cashback on spending. Often, this reward is only valid for spending up to a certain value or for a certain time after you first take out the card. It is important, therefore, to make the most of this offer by spending the full value if at all possible, and doing so while the cashback offer is still in effect. If you have any big purchases coming up like car insurance renewal and you were planning to pay cash for them, it can instead be worth putting them on your card in order to get cashback. You can then quickly repay the balance with the cash you were going to use for the purchase, and therefore avoid interest.

Gift Vouchers and Material Gifts

If you are given a gift voucher for a shop you do not normally use, then it might be possible to get more benefit out of it than you would from simply going to the shop specifically to use the voucher. It might be possible to turn the voucher into cash that you can spend wherever you like by selling it to somebody who does shop their regularly. Ideally, you will be able to make a deal with a friend or family member to exchange it for its cash value directly. They lose nothing because they shop there anyway, and you gain flexibility in your spending. However, it may even be worth selling it for slightly less than the credit is worth. For example, if a card comes with a £100 M&S gift voucher and you do not normally shop there, it is likely you could do more with £90 or £95 in cash at your normal shopping destinations than you could with the voucher, and you may well find somebody willing to pay this much. There are also companies that buy your vouchers, but they tend to pay disappointing rates.

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Tips to avoid unrewarding credit cards

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Reward credit cards are usually offered to customers with excellent credit histories. The idea behind reward credit cards is to encourage you, as a customer, to spend. This may be spending in general on your credit card, or spending your money with particular business partners your credit provider has a relationship with. Rewards can take the form of cash, gift cards, air miles or even hotel stays.  Reward schemes can be an important factor when choosing one card over another. Savvy consumers, can take advantage of such reward schemes and enjoy the benefits.

Reward credit cards tend to be associated with higher annual percentage interest rates and higher fees. Before choosing a reward credit card, consider: will the value of the rewards outweigh the extra costs associated with such a card? In some cases, it may be better decision to have a standard credit card with overall lower fees and rates of interest.

Cash back rewards are by far the simplest. It is pretty straight forward. You receive cash for spending a certain proportion on your credit card. Although cash back may not deduct the balance on your account, it’s still money! You can use it on whatever you like.

It is always important to weigh up the cost and benefit of reward credit card schemes. Some may not be as rewarding as they first seem. Use the following tips to avoid unrewarding credit cards:

  • Be wary of limited rewards.  A good reward credit card is one that increases reward as you increase the amount of money you spend. A limit on how many rewards you can incur is clearly not to your advantage. This is a restriction to stay clear off.
  • Be aware of when your reward will expire. Will you have a reasonable amount of time to use your reward before it expires?
  • How easy is it to redeem your reward? For example, if it is a free hotel stay, how accessible and affordable is it to get to the hotel destination?
  • How much money you are required to spend before you can start earning rewards?
  • Don’t spend on things you usually wouldn’t to chase rewards! This can lead to unmanageable debt.