Charge Your Way to Big Rewards
by Frances Rahaim, Ph.D.aka "The Money Doctor"
Someday this long cold winter will end. The sun will shine through again, sparrows and thrushes will return, brooks will flow and green will return to the valleys.
As spring dawns, thoughts, for many, will turn to vacation—where to go, what to do, how to get the most relaxation and rejuvenation bang for your buck. If you’re not planning right now for a summer vacation, it’s time to start.
These days, with a stubbornly sluggish economy and money tight everywhere, taking a vacation requires more planning than ever. Thankfully, there are some tricks you can use to make traveling much easier on the budget—and in some cases even free.
Here’s a tip for the travel season:
Credit Card Rewards: We’ve all seen credit card enticements with “free” bonus miles, frequent flier miles or reward points that add up with each purchase. You can then redeem the points or miles for free hotel stays, meals at restaurants, magazine subscriptions, free flights and more.
Of course, credit card reward points are simply a marketing come-on—a gimmick to get customers to open an account with that lender and presumably amass a balance on which they will pay interest.
However, if used advantageously, credit card reward points can be turned into a benefit for the customer, and can turn into free flights halfway around the world, or free hotel stays on a road trip down the coast.
It’s simple to do:
- 1. Find the credit card offers that reward the most bonus points for opening an account, and reward the most points with each purchase. Check online at creditcards.com or other sites for a list of offers, each detailing its reward points program.
- 2. Start charging.
- 3. Here’s the most important part: Every time you build up a balance, you must pay it off in full every month before the due date. By doing so, you will avoid any interest charges, and those points, and the rewards that come with them, will truly be free.
You can keep track of your credit card purchases by taking a blank checkbook register and using it only for purchases on that rewards credit card. Every time you use your rewards credit card write down the expense in that register, so that you have mentally noted it and can check it any time.
Also important: be sure not to alter your living habits just for the purpose of earning more credit card points. It’s a recipe for debt trouble. Rather, continue living as you always have, except charge regular expenses on that rewards credit card—groceries, gas, heating oil, car repairs, clothing, dining out. You’ll be surprised how quickly it adds up.
I’ve used this method before, and twice flew to Hawaii, even providing flights for others, all using free credit card reward points, and charging as many purchases as I can on the card—and always paying off the balance before the due date so that I didn’t pay any interest. (One tip: if you plan to fly internationally, check first to make sure your reward points can be redeemed on international flights; some cannot).
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