Reward programs can help you buy more for less

16 May 2008

Credit cards with a reward program are an excellent financial tool for those who can control their expenditure. Due to the money saving opportunity of interest free days on purchases, it is reasonably possible for a smart user of credit cards to earn a value in reward points that exceeds the annual fee they are charged. This can be straightforward, such as with cash back programs, or else the points can be redeemed for products and services from bonus partners.

Many reward program credit cards also allow customers to convert reward points into frequent flyer points, most often with QANTAS for Australian customers. While it may not be worth spending extra in order to gain reward points, if you do your shopping carefully you may be able to earn points without spending more on anything other than the annual fee of your credit card.

Issuers of credit cards have varying kinds of reward programs, generally with similar reward but dissimilar earning and spending structures. You will need to look for credit cards that give you reward points for all spending or all repayments if you wish to try and earn points with normal spending. Once you have chosen a suitable card, you simply use your credit card whenever you need to make a purchase.

You must now also make be sure to repay your entire balance before the interest free period runs out for your purchases. A trick for doing this is to set your maximum credit card balance to no more than you earn in take home pay per month and then set up your credit card to be paid off on a specific payday each month. Only when you use your credit cards as lines of credit do they tend to build up debt, so only use credit cards as a rewarding means of purchasing things.

Please visit our dedicated reward program page for a great selection of reward program credit cards.

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