It's no secret that the Nerds love a good rewards credit card. After all, everyday life involves a lot of spending -- why not rack up points or miles on all those purchases you're making anyway?
But many credit card rewards programs come with a lot of strings attached. As a result, it's important to know all the ins and outs of your card's plan to ensure that you're getting the most out of it. Not sure what you should be looking for? Start with these seven questions.
1. Do my points or miles expire?
You know how crummy it feels to buy a quart of milk, only to have it expire before you've had a chance to enjoy it? The same thing could happen to your credit card rewards if you're not mindful of the expiration date of your points or miles.
Carefully review your card's terms and conditions to see if you need to use them within a certain window of time. If so, make a plan to cash them in -- otherwise, they'll end up joining that carton of 2% that went down the drain.
2. Which rewards redemption option will give me the most value for each point?
These days, many cards offer multiple redemption options for the rewards you've earned: cash back, statement credit, travel booking, merchandise, gift cards, and so on. However, it's important to understand that the value of a point or mile could vary drastically depending on how you use them.
In general, merchandise and gift card redemptions will give you the lowest value per point or mile. But every card is different, so be sure to do the math to figure out where your points are worth the most -- then cash them in accordingly.
3. Do I need to opt in to get extra rewards?
Many cash-back cards offer quarterly rotating bonus categories, where you have the option to earn extra rewards at certain retailers throughout the year. This is a great way to jack up the amount of cash back you're getting with every swipe, but it's usually not automatic. You'll probably have to go online every quarter to opt in to earning extra with the featured retailers.
Knowing whether you need to take this step could be the difference between earning 1% cash back and 5% cash back, so it's something to be aware of.
4. Does the number of points or miles I earn vary with where I shop?
Some rewards credit cards have a flat earning structure, where a fixed number of points or miles is earned with every dollar spent. But other cards give bonus points for spending at certain retailers. For instance, one of the Nerds' favorite travel credit cards provides two points per dollar spent on dining and travel, one point per dollar spent on all other purchases.
If this is how your card operates, be sure you clearly understand how and where double points are earned. This could have a big effect on the number you're able to rack up!
5. What happens to my rewards if I close my card?
Closing a credit card is a controversial topic, but if you choose to move forward with it, spend your rewards before you do so. In many cases, unused points and miles are forfeited once your account is shuttered.
6. How much do I have to spend to get the signup bonus?
Many people are drawn to certain cards because they offer a huge signup bonus -- after all, this is a great way score a big chunk of points or miles right up front. But usually signing on to the card isn't enough to get the bonus. In most cases, you'll have to spend a certain amount with the card within a specified window of time.
Be sure you understand your card's signup bonus structure so that you can meet its requirements. Then enjoy your bonus!
7. Will I lose rewards if I miss a payment?
Missing a payment on your card is a bad move for your credit score, but it might also be grounds for your card issuer to withhold your rewards. Most credit card companies require your account to be in "good standing" before you can earn and redeem rewards. This generally means that you're up to date with your payments, so if you miss one, you could be losing out on rewards.
This is just one more reason to be sure you're paying your bill on time!
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