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8 ways to get the most out of your rewards.

If you’re looking for a credit card that will reward your spending habits, you have plenty to choose from.

Ideally, a credit card should earn you rewards on items you’re already buying ― not require you to overspend on things you don’t need (or want).

The following eight suggestions can help you get the biggest return from your rewards card:

  1. Pick a rewards currency that fits your lifestyle: Figure out what’s most important to you. Would you prefer to earn points for travel, cash or merchandise? Choose a card that will reward you the most in your favourite category. To make it easy, many companies let you view and compare credit cards so you can find the right one to fit your needs (for example, BMO offers compare credit cards overview).
     
  1. Be aware of “minimums”: Before applying for a card, do a little digging and see if it requires you to spend a minimum amount or purchase something specific (for example, a flight or hotel accommodation) within a specified timeframe to start earning rewards. If the minimum amount exceeds your budget, consider another card.
     
  1. Regularly review what you’re getting: Carefully read every update you receive about your credit card to make sure it’s continuing to give you the rewards you want. For instance, card changes or updates may mean you’ll earn fewer points on certain items or a lower percentage of cash, or that your hard-earned points will expire at a certain date.
     
  1. Factor in the annual fee: Paying an additional fee for a card could potentially cut into your rewards earnings. In some cases, though, the card’s amenities might offset the annual fee. Also, cards with an annual fee may offer a higher introductory bonus. Have a certain card in mind? Check with your financial institution or favourite deal sites for special offers and rates.
     
  1. Don’t overlook other perks: Rewards points and cash aren’t the only benefits a card can offer. Looking for a little peace of mind? Find a card that offers ample safety and security features. Pay attention to purchase protection, extended warranty, and added travel and medical protection, too. Love experiential benefits? Some cards offer special access to events, VIP airport lounges, and concierge services. Additionally, some cards offer 24/7 support, so you’ll have the peace of mind knowing someone’s at the other end of the line whenever you need them (even if it’s 2 a.m.). Be sure to factor in every benefit when making your decision.
     
  1. Focus your spending: It may be tempting to acquire several credit cards in order to maximize your rewards earning potential, however, applying for multiple credit cards in a short period of time may hurt your credit score (read more from the Office of Consumer Affairs). You may want to focus your spending on one or two favourite rewards cards to maximize the value of your rewards.
  1. Understand the rules of redemption: Many programs have changed their expiry rules so you can hold onto points for a longer timeframe, but it’s always wise to review your rewards program terms periodically. Also, be sure to understand your redemption options. You don’t necessarily have to redeem for big ticket items such as flights or vacations — many programs offer the option of redeeming for merchandise or gift cards to some of Canada’s most popular retailers. For example, with AIR MILES® Reward Miles you can choose between Cash and Dream Rewards: AIR MILES Cash lets you redeem instantly for everyday purchases, often at checkout, while Dream Rewards can be redeemed for travel and merchandise.1
     
  1. Pay off the full balance each month: According to BMO’s 2015 Credit Card Report, 46 per cent of Canadian credit card holders are currently carrying credit card debt, and 30 per cent do not pay their credit card bill every month. Since interest rates tend to be higher on rewards cards, it’s very important that you pay off your balance in full each month. Otherwise, any rewards you might be earning will be cancelled out by the high amount of interest you’ll be paying each month.
     

Looking for more financial tips? Read up on Coupons 101: How to save like a pro.
 
 
1 Cash Miles and Reward Miles are subject to the terms and conditions of the AIR MILES reward program, which can be found at airmiles.ca.

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