Save more with reward programs
5 March 2008
Credit cards that offer reward programs cost more in annual fees, but they can actually save you money.
By choosing a credit card with interest free days on purchases and an excellent reward program, your day-to-day spending can see you living in the lap of luxury. In fact, it could hardly cost you more than you currently spend.
Reward programs can offer benefits such as travel insurance, better airline tickets and preferential treatment for booking tickets for major entertainment events. Usually you have to spend reward points in order to gain these benefits. You accrue reward points for using your card at sponsoring establishments and by making sure your weekly purchases are gaining reward points, you will see the advantage in no time at all.
The key to maximising the benefits of the reward program of your credit card is to pay off the balance before the interest free period is up. The less you spend paying for interest, the more your reward points will pay off beyond the higher annual fee.
It can be tempting to spend more than you did before, but you must avoid doing so if you wish the new credit card to save you money. If you can, choose a credit limit that is equal to the optimum level of expenditure you would like per month. This means that if you pay off your card monthly, once you have reached your optimum spending level, it will be even more negative to continue spending. Methods such as this that discourage further spending than necessary can help you maintain a budget that takes full advantage of a reward program credit card.
For more information on reward program credit cards and to see the range we offer, please visit our reward program page.
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