Get It Done: Rack Up the Rewards

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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 Points.com and Mileport.com.
• 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 Points.com 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:

• Getting your credit under control in 60 seconds.
• How to find the best credit card ever.
• Why you shouldn't cancel your credit card.
• How following your lender's rules to pay off your cards is a loser's game.
• Some strategies for managing student loans.