Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



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 (7) | 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.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 630295, ~/Articles/ArticleHandler.aspx, 10/25/2016 3:08:25 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 5 hours ago Sponsored by:
DOW 18,223.03 77.32 0.43%
S&P 500 2,151.33 10.17 0.47%
NASD 5,309.83 52.43 1.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes