Rewards cards are the latest thing going now a days to help sell a credit card. Consumers want more bang for their buck. Especially in trying economic times. A rewards card is a good choice for people who pay off their balances each month. However, if you use a rewards card are you getting all that you can out of it? Some wise planning and expenditure habits can help rack up points.

The ultimate goal is to shift as much of your monthly discretionary and non-discretionary spending as possible onto your rewards credit card. On top of the extra rewards that you can earn there is the added benefit of getting a monthly statement reporting all of your spending for better record keeping. Since you will be using your card for all expenditures, you may actually get a better deal on your bank account by retaining a large balance throughout the month therefore qualifying for an interest bearing account. More bang for your buck!

The first thing you need to do is to choose the right rewards card. Not all rewards are created equally. Assess your spending. Most cards offer reward bonuses for spending in certain categories, as either a regular feature or a temporary promotion. Choose the cards that give you the most bonuses in categories where you spend the most. Blue Cash® from American Express is always a good bet when looking for a solid rewards card. Sometimes those great looking rewards programs are not what the make them out be.

For example, with one bankcard program you can redeem your points for merchandise. The merchandise variety is okay, but not great, the amount of points it takes to purchase merchandise is less great. For 25,400 points, you can get an 8G iPod Nano. However, a cash rewards program would give you $250 for 25,000 points enough to buy the player at Apple.com for $149, with $101 and 400 points left over. Cash can be more flexible and there are no blackout dates.

Now this does not mean you should only look into cash rewards programs, depending on your credit level you may or may not find a program that meets all your needs. The card you choose should meet your rewards preferences, offer low interest rates and great introductory rate and low or no fees.

Pay off each month.
The first rule of maximizing your rewards is pay of your balance each and every month without fail. This rule cannot be stressed enough. Smart financial planning is key. You want to keep your regular account out of arms reach so you will not be tempted to spend funds already earmarked to pay off the credit card balance.

Keep an eye on your points and your spending habits.
Do not horde your points. As hard as it may feel to let go of the points, it would be even worse to lose those points by not being aware of expiration dates or card terms that can change and devalue your points. The exception to this rule is on cards that offered rewards on a tiered scale and you are rewarded for saving points. Just be aware of any expiration.

Search for affiliations.
Many rewards cards accept points in exchange for gift cards to select retail outlets. When researching your card choice check into all the ways your points can be used. Some options may not be upfront; sometimes you just have to ask.

Carefully consider promotional rates and rewards.
Many times the long-term rewards are better than a short-term promotional award followed by long-term lower rate rewards. And be sure you are not trading a promotional reward in exchange for an annual fee.

Discover the no-spending rewards cards.
There are actually a few rewards programs that do not involve spending. For example, the Citi Drivers Edge card offers you one point (i.e. one cent) for every mile you drive in your car. You just send them a copy of your last oil change statement that shows the mileage on the card and they will send you the cash. There are also cards that offer a free companion airline ticket. By using these only when you want to take a trip, you can still save 50% on flights.

Use your card for daily purchases and expenditures.
Sometimes those little charges can add up to lots of extra points. Just be careful and know your limits. Do not spend more than you are able to pay off at the end of the month.

Take advantage of the minor benefits.
Virtually every card now offers quite a few minor benefits that most people do not take advantage of. For example, many cards offer emergency roadside assistance, extended warrantees and price protection guarantees. Find out what your card offers and use those benefits!

Savings rewards.
Even when you maximize your rewards, the truth is, getting back 1.5% of every dollar you spend may give you a little extra cash; however, it is not going to have a serious impact on your life. That is unless you use it very wisely. Do you currently save or invest on a regular basis? There is a chance this 1.5% may result in a significant increase in our savings. For example, some investment firms offer the 1.5% cash back and will automatically apply these rewards to a retirement account, or a 529 college savings plan. It all happens automatically so you do not have to mess with transferring the funds or be tempted to spend these rewards.

Be aware of annual and reward participation fees.
Very few cards come with a free rewards program, and those which do may still have a general annual card fee. The fee however, in relation to the benefits of the rewards is normally quite small. You can also pay more fees when you have multiple cards on a single account. Also like interest charges, the fees can devalue your rewards if you are not spending enough to exceed the fees.

Using too many cards can water down your points.
If you really want to maximize your rewards stick to only the one or two at most cards that really give you the most useable rewards. Here again there is an exception two companies Citibank and American Express will combine points from several cards into one convenient account.

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