13% of Credit Card Holders Could Lose Money for This Reason

Are you willing to give up money you're entitled to?

A lot of people use credit cards to pay for purchases because doing so is more convenient than constantly hitting the ATM and paying in cash. But a big benefit to using credit cards is getting to accumulate rewards, whether it's air miles, hotel stays, or good old cash back.

But some consumers are losing out on credit card rewards by virtue of not reading the fine print -- or understanding it. In a recent Wells Fargo report, 13% of consumers with reward cards don't understand how their reward programs work. And if you're in that boat, it's time to get schooled -- before you end up throwing free money away.

Do you know how your rewards program works?

Credit card rewards programs aren't necessarily cookie cutter. In some cases, your rewards might come in the form of a certificate that's emailed to you to redeem. In other cases, you may have to log into your credit card account, select a specific reward, and wait for it to arrive.

But either way, it's important to know how your credit cards' rewards programs work. If you don't, you might miss out on perks that could benefit you financially.

Let's say one of your credit cards offers you an annual credit to a specific retailer that you must redeem by a certain date. If you let that date pass you by, you'll give up the value of that reward. 

Similarly, many credit cards have revolving reward categories that let you accrue extra cash back on your purchases. One of your cards, for example, might offer extra cash back at the pump during the first quarter of the year, extra cash back at department stores during the second quarter of the year, extra cash back at restaurants during the third quarter of the year, and extra cash back at the supermarket during the year's fourth quarter. If you don't pay attention to those categories, you might swipe a different card -- and miss out on getting extra money in your pocket. 

Aim for simplicity

It's true that some credit cards have rewards programs that are harder to follow than others. And so if you'd rather not risk getting confused and missing out on rewards, go the simple route. Find yourself a credit card whose rewards program is nice and straightforward -- for example, 3% cash back on gas fill-ups throughout the year, 2% cash back at restaurants, and 1% cash back on all other purchases. 

Or, you might choose a card that offers 1.5% cash back on all purchases so you don't even have to commit to remembering which categories get you more money. Doing so could mean forgoing a little extra cash back when you fill up your car. But it might also be a better choice for you because committing that 1.5% figure to memory is pretty easy.

Credit card rewards could result in a lot of savings and more money in your pocket. And you don't want to miss out on those perks due to a lack of understanding.