Credit card video: Getting the most from rewards cards

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By CreditCards.com staff

Getting the most from rewards cards

Daniel Ray: I’m Dan Ray, Editor-in-Chief of CreditCards.com, and with me, is Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling.

Let’s talk about rewards points. I’ve heard something like 57 percent of all cards these days have some sort of rewards points attached to them, but you can either play the game to win, or play the game to lose. Gail, how do you win?

Gail Cunningham: Well, Dan, you wouldn’t get into any game until you knew the rules, would you? And that’s the same with playing the rewards game. People can win. I have a rewards card. I charge everything that’s above five dollars. Now why do I do that? Because I’m addicted to those points, those miles, whatever I’m earning off the card. But, likewise, I pay my bill in full each month and that is critical to winning the rewards card game. Why is this? Because if you carry a balance from month to month it is going to negate anything you could earn through your rewards because you’re going to be paying interest and you’re going to be paying an annual fee for that rewards card.

I never recommend a rewards card for someone just jumping into the world of credit. I think it’s too tempting; just like me, I’m all about earning the rewards and I charge lots of things. But it’s too tempting for someone who is new into the world of credit. So I would say get your feet wet with a general purpose card that’s a Visa or MasterCard.

If you can’t qualify for one of those, typically gas cards or store credit cards are a bit easier to obtain. Build a good credit history, learn to know yourself; how do you respond to credit? Are you a kid in the candy store, or do you keep track of how much you spend? You know you can go online daily if you want to and check your balances. But as far as a reward card goes, I would say that’s a good tool to use, you can win at the rewards game, but only if you’re going to pay your balance in full every month.

DR:We’ve been talking about winners and losers and how you get yourself into the winner’s column. With Gail Cunningham from the National Foundation for Credit Counseling, I’m Dan Ray.

Want to get the most out of that rewards credit card but aren't sure how to do it? Credit counseling expert Gail Cunningham shares practical tips to help you do just that.

Published: March 11, 2009

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