13% of credit card holders could lose money because of this
Many people use credit card to pay for purchases because it’s more convenient than constantly going to the ATM and paying in cash. But a big advantage of using credit cards is to accumulate rewardswhether it’s airline miles, hotel stays or good old fashioned cash back.
But some consumers lose out on credit card rewards because they don’t read the fine print — or don’t understand it. In a recent Wells Fargo report, 13% of consumers with rewards cards do not understand how their rewards programs work. And if you’re in this boat, it’s time to educate yourself – before you end up throwing away some free money.
Do you know how your rewards program works?
Credit card rewards programs don’t have to be cookie-cutter. In some cases, your rewards may take the form of a certificate emailed to you to redeem. In other cases, you may need to log into your credit card account, select a specific reward, and wait for it to arrive.
Either way, it’s important to know how your credit card rewards programs work. If you don’t, you risk missing out on benefits that could benefit you financially.
Let’s say one of your credit cards offers you an annual credit at a specific retailer that you must redeem by a certain date. If you miss this date, you will forfeit the value of this reward.
Likewise, many credit cards have recurring rewards categories that allow you to accumulate rewards. 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 fourth quarter of the year. If you don’t pay attention to these categories, you might slip a different card and run out of extra cash in your pocket.
Aim for simplicity
It’s true that some credit cards have rewards programs that are harder to track than others. And so, if you’d rather not risk getting lost and missing out on rewards, go the simple route. Find yourself a credit card with a rewards program that’s nice and simple – for example, 3% cash back on gas fill-ups all year round, 2% cash back at restaurants and 1% cash back on all other purchases.
Or, you can choose a card that offers 1.5% cash back on all purchases so you don’t even have to commit to remembering which categories earn you the most money. That could mean giving up a little extra cash back when you fill up your car. But it might also be a better choice for you because it’s pretty easy to memorize that 1.5% number.
Credit card rewards could mean a lot of savings and more money in your pocket. And you don’t want to miss out on those benefits because of a lack of understanding.
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