Personal Finance QuickTake: Credit Card Rewards

As I have said many times, even though there are cash back and other rewards available, for most of us it is a slippery slope that leads us back into overcharging more then you can pay off every month and enormous fees.

That being said, if you are going to use them, or are using them for work, get the most out of them you can. It can cost a credit card company more than $100 to get a new customer through the process of signing up. That is why every major card company has a good sized retention department to try to keep you as well. But as this story from Yahoo Finance states, half of people enrolled never collect their points/rewards!

Talk about money being left on the table! They get you to hold a balance, then you don't even get the reward!

Some of these rewards are never retrieved since we might not find anything we want. I had this issue with my CitiBank card. I kept saving our ThankYou points for the enormo-dome sized TV, meanwhile we probably would have been better off taking the gift cards and using that for holiday spending. (Actually we would have been better off not charging at all!)

Here are a couple quick tips:

1. The longer you hold them the more likely you are to not use them - Sure the vacation to Mars would be nice, but are you really going to get to the 2,000,000 point minimum bid? Probably not. Get the $50 gift card to Home Depot and fix your deck!
2. Point on Business cards -All it took was me paying the $75 to join and my company let me keep my American Express Points! It couldn't hurt and it is often an easy perk to give an employee,especially when you are a smaller company. This leads to #2.
3. Always sign up for the Mileage Points on Airlines - I hear so ofter that I only fly 2 times a year...as long as you fly every 18 months you miles won't expire. I did this for years before I became a frequent flyer and I had a nice 30,000 point pool built up when I did get status.
4. Sign up for the Hotel points too - Even if you don't stay to often at the Royal Pacific in Hong Kong, get the card. For having it i got free bottled water and Wall Street Journal.
5. Donate them to charity - Still have nothing that you can do with these? So many United miles that they carry you to the plane? Donate the points. The charities can use them to sell off or for their own travel. Many medical charities will use the miles to fly families to be together!

Overall point is that I wouldn't chase credit card points just to chase them. But is I am going to work my budget and clip a .20 off coupon for Peanut Butter, why wouldn't I take my $50 gift card to Home Depot!