This is a guest post by Mr Credit Card from www.askmrcreditcard.com. Today, he is going give us some tips as we manage our credit cards in the holiday season and towards year end. If you are looking for a credit card, then please check out his list of best credit card recommendations.
As we approach the holiday season, we will be tempted to swipe our credit cards more often as we pile up the gifts for our loved ones. In this post, I would like to highlight some best practices but also warn of things you should be aware of given the credit environment we are in.
Watch your reward points – Key a keen key eye on the reward points you have accumulated. Sometimes, we have a tendency to just leave the reward points in our account and just keep earning them. Well, I would say that you have to be careful. Why? Because
Some reward points expire – Some programs have points that do not expire, like American Express Membership Rewards and Diners Club Rewards. But others like Citi’s ThankYou Rewards or Bank of America’s WorldPoints expire in 5 years. You have to be aware if your points expire because otherwise, you risk losing them carelessly. If you have points tht will expire soon, then you should use them in any way you can.
Make use of your credit cards shopping portal – Some credit cards like the Discover Card and Chase Freedom have great shopping portals. But most folks are not aware of it. They are essentially partnerships with online merchants where if you shop at these online merchants through your credit card account you will earn rebates. Here are a few examples of the types of rebates you can get.
From Discover Card
Macys.com – 10%
GAP.com – 10%
Bestbuy.com – 10%
Make use of Purchase Protection and Warranty Extension Features – Many of the better credit cards have purchase protection features. It allows you to get a refund from the credit card issuer (up to a certain limit) is the thing you bought was stolen or broken accidentally after a certain period. Many cards also offer to extend the warranty of the product you bought (typically for up to one year). Hence, know this can save you quite a bit of money from warranty purchases.
But here are a couple of things to warn you about as well given the state of the economy and the spillover effects of the financial crisis:
Your rewards can be forfeited – Credit Card companies are getting stricter these days. Miss a payment and you risk your credit lines being cut, your APR increased or even your credit card closed. A late payment for your mortgage can trigger any of these actions. If your credit card is ever closed by the issuer, you risk losing all your reward points. So for example, if your Amex charge card gets closed, you risk losing all your membership rewards points. Or if your cash back rewards credit card pays out the cash rebate once a year and your card gets closed on the 11 month, then you will a year’s worth of cash rebates. That is why ironically, it is much better these days to have an airline miles frequent flier credit card because every month, the miles that you earn are automatically transferred to your frequent flier account. And your frequent flier account does not check your credit report and you will never lose your miles (unless they expire and your account has not been active).