4 ways to maximize credit card rewards


These days, reward programs are as much a part of credit card ownership as are interest rates and monthly balances. In fact, according to Affinity Solutions, nearly 45 percent of all existing credit cards are linked to some sort of reward program. From travel rewards such as holiday packages and rental cars to gift certificates and cash back offerings, Canadians have been quick to take advantage of such credit card incentives.

In fact, a recent RBC payment survey conducted by Ipsos Reid found that more than half (58 percent) of Canadians hold a credit card with some type of reward program. Nine-in-ten credit cardholders (88 percent) say they pay for travel using their card and more than half (53 percent) use it to pay for retail purchases.

But for all its benefits, the RBC survey also revealed that two-in-ten reward cardholders sometimes forget to redeem reward points. Others simply struggle to make heads or tails of a reward program's thresholds and earn rates.

Fortunately, making the most of a reward card is easier than you think. Here, RBC experts chime in on how to optimize your credit card rewards:

  1. Consolidate: Forget about owning multiple cards. "One of the easiest ways to make the most of a reward card is to put all of your spending on the one card, to earn rewards or cash back that much sooner," advises Anna Judek, RBC's senior manager card products.
  2. Think outside the box: Don't rely on your credit card for making just large purchases. Using plastic to pay for every day items such as groceries, gas, dining, gym memberships, newspaper subscriptions and clothing purchases can actually help you earn rewards at a higher rate than some other categories of spending. The trick, however, is continuing to spend smartly. It's never wise to rack up credit card purchases simply to collect points. However, Sean Amato-Gauci, vice president of RBC Credit Cards says, "If you never carry a balance and always pay your bills on time, you can actually make your card work for you by using it frequently for all kinds of purchases and expenses."
  3. Look beyond rewards: Reward points alone can't justify credit card ownership. Purchase security, extended warranty insurances and zero liability fraud protection are valuable features that can add value to existing reward programs.
  4. Read the fine print: While 5 percent cash back on all purchases may be enticing, it's critical that you look into a credit card's earn rates and thresholds before signing up. "With some reward programs, points expire so you need to remember to use the points or call the card issuer to request your rebate," warns Amato-Gauci. Other credit card companies send your rebate to you when you reach a certain threshold or credit your account automatically at the beginning of each year so be sure you read the program's fine print.


Published July 2, 2010

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