As a reward card guru, I have learned many tricks to maximizing my rewards.    You could search through all of the archives here at the AskMrCreditCard blog, or I can condense it for you:

1.   Always pay your balance in full, and on time.   Clearly you are not getting any reward if you are paying interest.   The cash back/miles/or points you receive may be worth something, but I will bet you it is a lot less  than the interest you are paying.  I say it all of the time, but I can’t say it enough.

2.  Always pay your bills online.   When you mail a check, you really have no way of guaranteeing that the check arrives on time, or proving it if there is a problem.   Paying online saves time and stamps while giving you peace of mind and insurance against any unjust late fees.   Finally, you earn interest on your payments until their due date.

3. Make major purchases after the statement closing date.    I can wait a day or two when buying a new refrigerator in order to pay the bill 30 days later.   It doesn’t seem like much, but it adds up over time.   Being conscious of my due dates also allows me to better control my spending and and ensure that I always have money on hand to pay my balance in full.

4.  Consolidate your spending.   My favorite card is my Starwood Amex.   If a retailer takes Amex, they will see it.   If they don’t, they will see my Capitol One Visa.   I use it so little, that it hasn’t been worth my effort to upgrade to a 2% cash back card.  I have a few other minor exceptions, but that covers 99% of my spending.

5. Determine the value of your rewards.  Quantify what a reward point or mile is worth to you.   I know that I routinely get 3-4 cents per Starpoint in value for every dollar spent.   I can get that because the card is so flexible in terms of converting to airline miles, and the hotel rewards have no capacity limits or blackouts.

6. Go for sign up bonuses.   If a card has a great sign up bonus, get it.    You can always cancel the card later.  A big myth is that the more cards you have the worse your credit is.   Roughly the opposite is true.   In fact, the more available credit you have, the better your credit score.  The only problem is if you apply for many cards at once.   Even then, the impact on your credit score is minor.    If you always pay your bills on time, the difference is trivial.

7. Leverage your spouse.  It makes no sense for you to be accumulating points in different programs.    Get the same cards, and double your sign up bonuses.   If there is a bonus for certain spending levels, get your spouse a card on your account, and hit that spending mark.

8.  Never let rewards influence your spending.   Often times cards will offer additional rewards for certain purchases at certain merchants.     Don’t fall for that trap.   Always shop for the best deal in a product or service.   If you can find it cheaper on E-Bay or Craigslist, buy it.    I have rarely taken advantage of these offers, as I often find the item I want at a discount store for less than the “preferred” merchant.   Money saved is always better than rewards earned.

9. Know your terms and conditions.  It is hard to decipher them sometimes, but you do need to take a skeptical look at the reward structure’s fine print.   Often there is a maximum annual reward, an exclusion of certain purchases, or an introductory structure that expires soon.    Even worse, some rewards are distributed annually, unless the card issuer decides to cancel your account for no reason!.

10. Keep up with the news.    As a credit blogger, I do this more than most.   What I find out are some amazing loopholes.    People buy traveler’s checks or coins, earning thousands of dollars in free travel with minimal effort.    Companies offer promotions, both on purpose and by mistake, that you have to register for.     Likewise reward programs are frequently devalued with little or no notice.   Stay on top of things and you can profit from your credit cards more than you can imagine.

These are the best tips I know.  I am sure that I have written several blog posts on some of these subjects.     Keep reading the blog at AskMrCreditCard, and send us your questions or comments.

This entry was posted on Thursday, July 30th, 2009 at 20:00 and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.