Get It Done: Rack Up the Rewards

Does your credit card give you something back each time the cash register rings? More than half of cards issued have a rewards component -- typically worth $0.01 to $0.03 per dollar spent -- from free Frappucinos to contributions to Junior's college fund.

Perks aplenty; gotchas a-go-go
Airline miles are so yesterday. To make their perks look richer, today's rewards programs offer chits with retailers, environmental groups, resorts, and even discount brokerages and college savings plans. And then there's cash back. Payouts of up to 5% are becoming standard fare. (Note the "up to" verbiage.)

New customers are wooed as fiercely as pro athletes -- signing bonuses and all. You can often get enough points for some valuable goodies just by applying. But while finding a loyalty program that suits you isn't difficult, cashing in on it -- well, that's another story.

According to Consumer Reports, 75% of airline miles go unused each year. It's no wonder, given the plentiful and ever-changing rewards-card restrictions. Popular frequent-flier programs have instituted tighter expiration guidelines for unused miles. Many programs render points worthless within a year or two and even start the use-it-or-lose-it stopwatch retroactively.

It's not just credit card companies watching the clock: Airlines are also forcing people to forfeit miles if enough time goes by without any activity. Often, you can revive expired miles, but at a cost -- fees that are sometimes so high that it doesn't make sense to pay them.

Nevertheless, don't give up entirely on the free-lunch promise of loyalty cards. Just recognize that going from frequent buyer to frequent flier requires some detailed planning -- and some discipline. Rewards cards often come with high interest rates, so they aren't usually a smart choice for those who carry a balance. Make sure you're the one who's being rewarded -- not the credit card company.

Tips from a pro
One fellow Fool I work with is a loyalty travel guru. In three years, she's taken $35,000 in free trips -- to Africa (three times), India, and China. Her secrets: flexibility and persistence. She consolidates points with Starwood Hotels (and its dozens of airline and hotel partners), plans six months before departure or snags last-minute deals, and doggedly calls to cash in. More of her tips:

  • Concentrate to accumulate. Don't limit your point potential by spreading spending across multiple cards. And sign up for all major airlines' frequent-flier programs. They’re free, and they come with member-only alerts.
  • Look for alliances to redeem rewards with other airlines, hotels, rental car companies, and retailers. Official partners offer more value per point.
  • Keep track of your bounty, expirations, and deals with free programs at and
  • Don't let rewards expire. Account activity may be as simple as visiting your credit card's reward redemption website to get magazine subscriptions or iTunes downloads. And watch the clock if you want to transfer or consolidate miles among different account holders to reach the reward. Each program has its own window during which that's allowed.
  • But don't cash in too soon. Tiered programs reward patience by offering bigger rewards to customers who wait and redeem more points per transaction.
  • Top off to cash in. Buy the points needed for a freebie through the airline or program or check out to augment, swap, redeem, or donate rewards.
  • Use points to pay for the priciest perks. Sometimes, a free ticket isn't the best deal. For instance, using points to upgrade from coach to business class on an international flight may actually save you more than using them to get the coach ticket in the first place.

For more on managing your credit, read about:

Dayana Yochim dreams of collecting millions of frequent-flier miles and never having to pay for travel again. She's always on the lookout for ways to help you make the most from your credit cards.

Read/Post Comments (6) | Recommend This Article (18)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 12, 2008, at 10:34 PM, travelbum wrote:

    I have a Mastercard attached to my Fidelity mutual fund account that gives 1.5% cash back on everything; and the money just directly gets added/invested into my account each quarter. I use this card for everything that doesn't fall into the 5% or 3% catagories (other various cards I hold).

    Sometimes I need a spreadsheet to keep track of what to use for what purchase and up to what amount each month; but it's worth the $1000 or so I take each year in cash rewards back for using these 4 or so cards!!

  • Report this Comment On August 07, 2011, at 2:33 PM, wintermulp wrote:

    my head is about to explode trying to absorb and understand this financial lingo. Appreciate advice on

    a beginners stock investment.Thx

  • Report this Comment On March 23, 2016, at 2:47 AM, CherylTate wrote:

    I was looking for something different butelated and I found this article which of course is worth to try.Author is straight to the point in the posts and very good info porvided for us readers, by the way very nice post this one indeed.

  • Report this Comment On May 28, 2016, at 1:51 AM, kshasha wrote:

    I met a game planner who gives playstation codes and he do not want any money for it. He said that i have these all free of cost.

  • Report this Comment On July 25, 2016, at 6:28 AM, jasoonnn wrote:

    I’m going to watch out for brussels. I’ll appreciate if you continue this in future.

  • Report this Comment On July 28, 2016, at 6:36 AM, jasoonnn wrote:

    Hey this is kind of of off topic but I was wanting to know if blogs use WYSIWYG editors or if you have to manually code with HTML.

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