There are plenty of credit cards on the market, and there is more to choosing a card besides what the interest rate is. Rewards have gotten pretty popular over the years, as companies reward you for purchasing items with their card, so for your benefit, if you are going to use a credit card for purchases and pay the balance off, why not get the best possible rewards coming back to you just for using the card.
Redeem for Gift Cards
The best rewards that a credit card can offer to you in return of using their card for purchases is pretty straightforward: cold hard cash. Now keep in mind that the credit card company will not be mailing you a stack of cash in the mail, but a check made out to you that you are able to deposit is the best no-strings-attached approach. Other cards may offer points that you can redeem into gift cards or shopping for items within the site. Gift cards are a good way to have a free night out on the town at one of your favorite restaurants.
Have a VIP Experience
Depending on the credit card that you carry, it may offer experiences in return instead of typical rewards such as points or dollars. You could redeem rewards for concert tickets or a wine-tasting experience. Sure, it may not be cash back into your pocket, but it is an essentially “free” experience that you would not otherwise have, without breaking the bank.
Use Towards Debt
Now on to the responsible portion of how to spend your rewards dollars. If you are in debt of any kind, it should go towards that – maybe getting a payment or two ahead for a little cushion. To carryover a credit card balance means wasting money on interest so if you have any extra cash to put towards the balance, it will save you money in the long-run. Also, you could also put a little extra toward your mortgage principal balance.
Plan a Trip
If you are like me and use your rewards credit card for everything, the dollars can really add up and a huge check can arrive in the mail once a year with all of the cash-back acquired in the previous year. What better way to use the money for then to plan a trip and cover lodging, a meal or two, and drinks for a much-needed trip away. After all, it is money that you did not have before.
Give a Charitable Donation
Sure, I know it is free money and you probably want to spend it on yourself or pay down debt for what you have already spent, but a charitable donation is also a good way to use rewards points. After all, it is money that you did not have before, so you could donate to those that are in need. Be sure to keep a receipt though, because it will be tax-deductible, so there will be a portion that you can get back.