You have a rewards credit card that you’ve been using for awhile. You’ve racked up a decent number of points but you haven’t spent them yet. For most people, this is due to the fact that they aren’t quite sure what they want to spend their rewards on. Many people are also a little bit concerned about the details of trying to spend their rewards.
Here are some things to keep in mind as you select the rewards that you’re going to spend your points on:
- Only spend the rewards that you’ve actually earned. Many rewards programs let you advance points which can be appealing because you get bigger prizes for your spending. However, you’ll have to pay for these points later if you don’t spend enough on the card to earn them within a certain amount of time. Only spend the actual number of points that you’ve already earned on the card
- Look first at cash back rewards options. If your rewards card offers you the chance to earn cash back then this is the option that you should go with whether it’s in the form of a payment on your debt or in the form of an actual check. People always need money more than they need more stuff so look at this choice before reviewing any other options.
- Read the fine print. Some cards will give you an extra cash back reward if you hold on to your points until you’ve earned a certain amount. Other cards will take your points away if you hold them too long and they expire. Read the fine print about your rewards before you make a decision about spending them.
- Buy gifts for others. The best way to actually save money when using rewards to get items instead of cash is to purchase gifts for others with your points. Make a list of the people that you regularly buy gifts for (family and friends that are always on your Christmas list, for example). When shopping with your points, go through the list and see what you can buy for these people. Whether it’s a gift card or an actual item, you’ll be getting something with your points that will allow you to save money later since you won’t have to make that gift purchase when the holidays roll around.
- Decide if you’re buying something you always buy or something indulgent. If you’re going to use the points to purchase stuff for yourself, determine in advance whether you want to get something you’d never buy for yourself or something that you would have bought anyway. The latter will save you more money but the former is a nice little treat. Deciding this in advance makes it easier to figure out how to spend your points.
The best use of rewards points is when you shop with them in a way that saves you money either through getting cash back or through making purchases that you would’ve paid to make anyway.
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