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You Earn the Points, but Credit Card Companies Score the Most

If you are watching television at all these days, you have probably seen the ads that make credit card points look like a real score. In truth they can be. If you use a credit card correctly you can get some real deals by taking advantage of credit card incentives.

But many of us may not disciplined enough or don’t have the time to investigate the best deals to take best advantage of. Remember, a business doesn’t offer a deal unless it thinks it will benefit from it. The win for credit card companies is people use the cards more. And that, of course, is where the trouble starts.

If you think you have the smarts and the will power to use points effectively, here are three rules you must follow to come out ahead in the credit card points game.

  • Do your homework. Find out if the cards you already use offer deals, because closing accounts to open others can have at least a temporary effect on your credit score. Many cards offering points charge you annual fees that effectively negate the rewards you get for using the card.  Also, some of the rules for redeeming rewards can be onerous. Check out consumer sites to find out which cards offer the best deals.
  • Pay your balance off in full every month. Do not carry a balance. The moment you start paying interest on any purchase, you lose and the credit card company scores. One company makes you have 2,000 points to get a $10 gift card, so that means each point is worth half a cent. Half a penny is hardly worth the extra money you’ll spend on interest if you carry a balance.
  • This is the big one. Only buy things you were going to buy anyway. One of the most recent advertisements shows a Dad volunteering names for people who can go to a concert because he is imagining how many points he will get for buying the tickets with his credit card. The moment you start buying things just to get rewards is the real moment the credit card company comes out to be the big winner. You can find stories online of people who have hit pay dirt with rewards programs, but in each case the winner makes clear that he or she carries no balance and only buys things within a monthly budget.

The biggest question to ask yourself before you consider letting points and rewards become a factor in your spending is whether you have the discipline to use these programs to your advantage. If there is any chance that you would end up spending more than what your budget can afford, our recommendation would be to back away from what looks like a great deal. The programs have the potential to get you rewards you would not otherwise get, but most people end up on the losing end of the game.

You can always learn more by talking to one of our certified credit counselors or visiting our blog at

Published May 29, 2014.