How to Use a Reward Credit Card

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Reward credit cards, when used wisely, can earn you free stuff just for spending on your credit card.

Follow our guide to how to use a reward credit card and learn how to maximise your earnings and keep them free!

Make the most of your card...

- The more you spend, the more you earn!
Rewards are earned when you spend on a reward credit card - the more you spend, the more rewards you will earn back.

However, it's important to remember that you should switch all your current spending to your reward credit card and not spend out more just to earn points.

Switching all your current purchases from your debit card to your reward credit card will give your reward earnings a big push in the right direction. Remember to use your reward credit card for your weekly shopping, petrol and other everyday items.

- Look out for bonuses and extra rewards
Many reward credit cards will offer bonuses as a joining incentive when you open the account or with your first card purchase. These bonuses can be a great way to kick-start your reward earnings, and can often be enough for your first reward!

Look out for extra points or miles too - specific reward credit cards will offer you extra earnings when you shop with their retailers or companies.

If you fly regularly with a particular airline, or you have a favourite shop - choose a reward credit card that works with that retailer or company - and then always use your reward credit card when you buy anything with them.

- Get yourself some rewards!
Don't hoard up thousands of points or miles without ever redeeming them for rewards.

Whilst it's nice to get a huge number of points to get some serious savings off your next holiday in the sun, make sure you actually use your points and get yourself a nice reward!

Some reward schemes set expiry dates on their points or miles - check your reward credit card and find out if, and when, your points or miles expire - and then make sure to redeem them whilst they are still valid.

- Budget your income and always repay your spending
The best way to use a reward credit card is to spend, spend and spend a little more.

However, with all the spending you’ll be doing on credit, it's vital to remember to budget your income so that you can repay all of your reward credit card spending each month.

Repaying your spending, will not only keep you safe from spiralling credit card debts and look after your credit score, but it will keep your rewards free.

Credit card interest rates will always outweigh the amount of rewards you are earning, and if you carry a balance over on your reward credit card the interest you are charged will effectively remove any of the money-saving benefits of your rewards.

Things to watch out for...

- Remember to play fair!
Credit card companies will always look after their money first, and whilst your reward credit card may be earning you free rewards, as a credit card deal the card issuer will always have set terms and conditions in place in case you fail to play fair.

Look after your rewards and make sure you always make your monthly payment on time and never exceed your credit limit - if you don't, you may see your rewards disappear rather quickly.

- Cash transactions
Cash transactions rarely sit well on credit cards - especially where your pocket is concerned.

You won't earn any rewards for cash transactions and they usually carry handling fees and higher rates of interest - plus, they are rarely included in any interest free periods, so even if you repay your balance in full, you will still be charged interest from the date of transaction until repaid.

Remember to try and always use your debit card for accessing cash or any cash transactions, including ATM withdrawals, getting 'cash back' at the supermarket, buying foreign currency or traveller's cheques and gambling transactions.

- Balance transfers
Reward credit cards may often tempt you with a promising money-saving balance transfer deal. However, if you need to transfer a balance you should get a separate card offering a 0% balance transfer.

If you transfer a balance to a credit card and also spend on it - unless it offers the same introductory rate for the same period of time - your card issuer will always allocate your payments to your cheapest debt first, like your balance transfer, leaving any purchases or cash transactions to become trapped behind your cheaper balance transfer until it is repaid in full.

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