The Do’s and Don’ts of Credit Card Rewards Programs

Reward Yourself

Snagging credit card rewards can be a great feeling, but how do you get the most for your money? The Cheat Sheet chatted with three credit card experts to get some answers. In part two of our chat, Gerri Detweiler, head of market education for Nav; Kali Geldis, editorial director of, and Beverly Harzog, credit expert and author of The Debt Escape Plan, share some do’s and don’ts when it comes to participating in credit card rewards programs.

Understand how credit card rewards programs work

Before you get a rewards card, know the ins and the outs of these programs. Geldis says this will help you decide if a certain card is right for you. You can do this by going to the credit card issuer’s website and familiarizing yourself with the details of each program.

There are a lot of different types of rewards credit cards: cash back, miles, and points. Each system works a bit differently, but you can (and more importantly, should) always take a look at the rewards program details of the credit card before you apply to make sure it’s a fit for you…You can get cash back in different forms—some cards allow you to redeem as a statement credit (essentially taking your rewards earnings off your monthly bill), some will allow you to direct deposit it into your bank account, and others will let you redeem your rewards for gift cards. Some cards let you do all three; it depends on the rewards program.

Make sure your credit is in tip-top shape

Before applying for a rewards card, it will be important for you to have a good idea of where you stand when it comes to your credit score. If you have a bad score, it’s unlikely you’ll be approved for a credit card.

“Have an idea of your credit score before you apply. If you apply for cards you don’t qualify for, it will damage your score. Each time you apply for a card, called an “inquiry” on your credit report, you could possibly lose anywhere from two to five points off your credit score. You can get a free educational score from many websites or you can pay for a FICO score on Also, many issuers now offer free credit scores on your monthly statements,” Harzog said.

“You can check your credit scores for free on to see where you stand and even check out credit cards that could be a good fit for you based on your credit profile,” adds Geldis.

Pay attention to fees

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When deciding which card is right for you, it’s important to compare the fees and interest rates. Rewards credit cards generally have higher interest rates than their non-rewards counterparts. Geldis says high fees and interest rates could gobble up any rewards you earn, so it’s best not to carry a balance from month to month.

“Some rewards cards come with an annual fee, so make sure you do the math to make sure you’ll spend enough to earn rewards on the card that will more than make up for that annual fee. This isn’t an invitation to overspend though! There are cards without an annual fee that have perfectly fine rewards programs,” Geldis said.

Use your points

Don’t let the points you’ve earned go to waste. What’s the point of obtaining a rewards credit card if you don’t take advantage of the benefits? Detweiler advises rewards card holders to grab up those points before they’re gone.

“If you’ve earned them, use them. I once had an Alaska Airlines card that I earned enough miles on to take a trip to Alaska to visit my sister. The only problem was she had moved. (And this was before those miles were as flexible as they are today.) I ended up letting them expire, so it was a total waste,” Detweiler said.

Don’t overspend

Getting rewards isn’t an excuse to spend recklessly. Only purchase items that you actually need. Geldis warns that the lure of earning credit card rewards can tempt you to spend more than you can afford to pay back in a given month.

“If you’re spending just to earn rewards, you’re likely going to regret the purchase down the road. Find a card that fits the way you already spend, Geldis said. “If you travel often and are loyal to an airline or hotel chain, check out their credit card offerings. If you spend most of your money on gas and groceries, find a card that will reward you for those purchases. There are so many credit cards on the market; it’s just a matter of finding the right one to fit the way you already spend.”

Monitor balances

Take some time to check your reward balances periodically. This way you can make sure that you use all of the points you’ve earned before they expire.

“I just redeemed a small number of miles left in an account with an airline whose card I no longer have, and rarely fly. It got a one night hotel stay in Miami where my husband and I caught a Marlins game. It wasn’t anything major but they were about to expire, so at least this way I got some use out of them. The holidays are coming up and perhaps you can get some gift cards using the points you’ve accumulated. Redemption for gift cards and merchandise can take a few weeks, so check that out now,” Detweiler said.

Go here for part one of this discussion.

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