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5 Steps to Choosing and Using a Rewards Card

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With rewards cards available for gas, air travel, groceries, retail stores and more, it's possible to earn bonuses on nearly everything you buy.

But it pays to think about your spending habits and what kinds of rewards you want before you start applying. Here are five ways to make sure you get it right:

        • Narrow your options. You could carry a wallet full of cards, earning rewards here and there, but JJ Montanaro, a certified financial planner ™ professional with USAA, says concentrating on one or two cards could earn you more rewards in the end. Spreading your purchases over many cards could end up diluting your rewards. If you want airline miles as a reward, make sure you compare competing cards so you get the best deal.
        • Choose the right card. Where do you spend the most money -- at the grocery store, on plane tickets or in retail stores? Maybe you want double points for gas and groceries? Maybe you need points that don't expire? Take the time to consider what kind of card will best fit your lifestyle and spending habits.
        • Spend wisely. It might sound obvious, but keep an eye on your card balances and interest charges. Don't rack up a high balance just to earn more rewards, especially if you pay more in interest than you earn in bonuses. "The reality is there is no need for you to carry a balance," Montanaro says. "You can reap the rewards without having to pay the interest."
        • Read the fine print. Understand the terms of your credit card so you don't lose points or cash rewards because of a late payment or expiration date. It's also smart to know what incentives and special offers are available with your card. Focused on airline miles? See if booking hotel rooms and rental cars with your card earns you more miles, for instance.
        • Enjoy your rewards. If you love to travel or just want a little extra cash in your pocket, a rewards credit card can help you get there faster. With a little research to find the best deal for you and judicious use of the card, you could soon be on your way to rewarding yourself -- with a free trip to the beach or enough cash back for a new pair of shoes.

Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP® and certified financial planner™ in the United States, which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

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Contributor

USAA, a diversified financial services organization, is the leading provider of competitively priced financial planning, insurance, investments, and banking products to members of the U.S. military and their eligible families. Rated among the highest among financial services companies for customer advocacy in a Forrester Research survey, USAA provides convenient and accessible financial products to its more than 9 million members. For more information about USAA, or to learn more about membership, visit usaa.com
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