Sign up for our FREE Monthly Email Newsletter
In addition to keeping in the financial know, you may be interested in checking your credit score and report.
¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.
²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.
³Equifax Credit Report Control™ is only available while you have a current subscription to Equifax Complete Premier. Locking your credit file with Equifax Credit Report Control will prevent access to your Equifax credit file by certain third parties, such as credit grantors or other companies and agencies. Credit Report Control will not prevent access to your credit file at any other credit reporting agency, and will not prevent access to your Equifax credit file by companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file; Federal, state and local government agencies; companies reviewing your application for employment; companies that have a current account or relationship with you, and collection agencies acting on behalf of those whom you owe; for fraud detection and prevention purposes; and companies that wish to make pre-approved offers of credit or insurance to you. To opt out of such pre-approved offers, visit www.optoutprescreen.com/.
4We will require you to provide your payment information when you sign up and we will immediately charge your card $4.95. After that, we will charge the card $19.95 for each month you continue your subscription. You may cancel at any time; however, we do not provide partial month refunds.
Equifax® is a registered trademark and Equifax Complete™ Premier is a trademark of Equifax, Inc. © 2014, Equifax Inc., Atlanta, Georgia. All rights reserved.
The holidays are one of my favorite times of year to give myself a gift—rewards from my credit card purchases. These rewards add up over time and help our family save money on travel, merchandise, and gift cards.
Our family tends to puts a little extra money on our cards during the winter months to purchase holiday presents. At the same time, the two rewards credit cards we use often offer extra shopping incentives during November and December, such as double-cash-back rewards for making purchases at certain big-name websites or chain stores.
It’s a win-win for our family—gifts for loved ones and extra cash back for us.
Six things to remember about credit card rewards
As you probably know, rewards credit cards come in many different packages. Some cards offer points toward airline ticket purchases or hotel stays; others give you points or cash-back options you can use to buy merchandise or gift cards, get cash, or pay off your balance.
It can take a bit of shopping and comparing to find the right rewards card for your family. Check out websites like Creditcards.com and Nerdwallet.com for help. (Full disclosure: I occasionally write for Creditcards.com.) Once you find a rewards credit card that you like, make sure you’re getting the most out of it by keeping these six tips in mind:
1. Be cautious about chasing rewards. Most of us have done it—and lived to regret it. It’s easy to get in trouble when your credit card issuer offers you tempting bonus rewards if you make a certain number of transactions per month or hit a certain spending goal.
Those rewards are fine if they match your regular spending patterns. If, however, this type of incentive causes you to put more money on a rewards card than you normally would—or to buy things that are more expensive than you’d normally choose—it means you’re letting the rewards take control of your finances. And it’s just not worth it.
2. Don’t carry a balance. Think about it: If you don’t pay off your rewards card balance every month, you’re undoubtedly paying interest and fees that negate any rewards you’re earning.
Your best plan of action, of course, is only to charge what you can actually pay off every month. But if you must carry a balance on a credit card, make sure it’s on a card with a low interest rate (and keep in mind that rewards cards often have rates that are slightly higher than non-reward credit cards).
3. Know your spending patterns. Some cards offer better rewards for purchases of gasoline or groceries. Cardholders with long daily commutes or big families would score nicely with these cards. Our family doesn’t drive much, and we’re fairly frugal about our food purchases, so these cards don’t appeal to us.
Likewise, someone who travels regularly for business might appreciate a rewards card that focuses on hotel stays and airline miles. Know how you spend your money in order to pick the card that works best for you.
4. Think carefully about annual fees. There’s no hard-and-fast rule, but you’ll almost always be better off if you can find a rewards card that doesn’t charge a fee. For example, if your card charges a $70 annual fee and offers rewards of 1 percent to 3 percent cash back, you’d have to charge $2,333 to $7,000 per year just to break even. You’d have to charge even more than that to earn any real cash-back benefit from the card.
5. Compare the costs of your redemption choices. Card issuers don’t always make it easy to figure out what’s the best deal when you’re ready to redeem your rewards for miles, merchandise, gift cards, or cash back.
In general, I’ve found that merchandise tends to be the worst deal. Depending on the card, targeted redemptions often offer the best deal—like airline miles from an airline-branded card. Gift card purchases are usually the next-best deal followed by statement credits and cash back.
6. Use all credit, including rewards cards, wisely. If you’re planning to apply for a mortgage or car loan in the next few months, you might want to wait to open a new rewards credit card account because doing so can temporarily ding your credit.
On the flip side, if you find a rewards card you love so much that you’re charging it up to your credit limit each month, consider opening a second, different rewards card and splitting your spending between the two accounts. By doing so, you’ll utilize your available credit in a more balanced way—a factor that can positively affect your credit score.
Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.