How to Use Your Credit Card Reward Points

As you assess the damage on your monthly credit card statement, you notice that you've accumulated hundreds or thousands of points. You've yet to use them and you never bothered looking at that little catalog they sent you, a while back. Questions swarm your mind. What are reward points? How did I get them? How do you redeem them? What's the best way to use them?

What are rewards points? Rewards are redeemable points accumulated when you use your credit card to purchase items. Though purchases can include anything from groceries to vacations, it may depend on your credit card terms of agreement. In some cases, rewards points aren't limited to just credit cards. Banks like Chase Bank allow you to enroll in a reward point program via debit card, provided you choose the credit option while using your card. Each bank is different when it comes to the dollar/ point ratio. With some points, you acquire a point per every dollar spent. Bank of America has a card where you can earn three points per $1 on gas, grocery and drug store purchases. Other lenders may have a deal with airlines and resorts that allow you double the points when you use your card with their company.

What can I do with my points?You know that vacation you never could afford? With rewards points you can book a hotel, plane ticket or rent a car. You can rock in the front row at the latest Green Day concert or tailgate at the next Super Bowl. You can get cash back for points. Depending on your card, you can buy anything from the latest gadgets to diamond rings and gift cards.

You can save your points or redeem them. Get creative. Thomas James, known on Twitter as HomelessThomOC, began using his points after being laid off from his six-figure corporate development job over a year ago. He converted his United Airline points to hotel points and he now lives out of his BMW and uses his points to stay at the Holiday Inn. "When I accumulated them, I was hoping it was going to be for trips to Hilton Head to play golf or trips to wine country or Europe. But turns out I used them to put a roof over my head," James told CNN reporters.

How do I redeem my points? With most major banks having websites, you can search your options and redeem your points online. You may also call your bank's credit card department to redeem your points over the phone.

How can I join the rewards points program? Just because you have a credit or debit card, doesn't mean you automatically get points. Not all credit cards carry the option. In order to see if your card is eligible for rewards points or to activate your points, visit your card's website or call the lender. Some programs require a fee and not all purchases gain you points so make sure you understand your terms of agreements before activation. Though it may be tempting to pay that extra bit to get those points, a reward point card isn't for everyone. If you don't think that you will ever get around to redeeming your points, it may be a waste a time. Do the research. Find out how to take advantage of the best card for your wants and needs.

Stacy Evans
http://www.icreditinc.com