Your Cashback Rewards
Experts highly recommend regular redeeming of earnings on your cashback rewards so that they will not decline in value or even disappear completely.
Cashback credit card are one of the best ways to have money in your pocket while still spending on those things you usually buy, like groceries or gas. These rewards give cardholders the chance to earn a specific percentage on the purchases that they make and redeem these earnings that are commonly in the form of gift cards, statement credits or cash.
However, it is somewhat disappointing to know that many cardholders fail to make the most out of this amazing perk. Based on a study conducted, it was found out that 1/3 of all the rewards, everything ranging from cashback rewards to airline miles, worth $16 billion are unredeemed every year.
Specifically with cashback rewards instead of cash out earnings, most of the cardholders only let these accumulate, using their cashback programs as their piggy bank. Even though there are credit card companies that offer their customers with incentives for waiting to redeem their earnings until they reach a particular amount, cardholders will be better off if they cash in every month or at least each quarter. Below are the top reasons why:
You Can Use Rewards for Paying Off Your Card Balance
There are people who bank rewards to pay for a large purchase. However, the truth is you don’t really save any money when your card balance, together with the interest that you are paying on it, is also growing every month. it is highly recommended that you use your rewards for paying down the balance that you’ve got. There are several card companies that let you redeem rewards for statement credits that you can use for reducing your balance. When your program is not offering statement credits, you can just deposit the cash in your checking account before using it to help you in paying your credit card bill.
Rewards Can Decline in Value or You Risk Losing Them
Banks tend to change their programs’ terms anytime they want. As a result, your rewards’ value can also drop. When you are delinquent with your account and it ends up closed as the result, you will also risk losing all your rewards. This is not to mention that there are companies that have expiration dates set for redeeming rewards. If the company stops its operations, your rewards will all be lost as well.
Use Rewards for Your Purchases
As mentioned earlier, you might be saving up the rewards that you got to buy something big. However, you have to realize that it doesn’t make any difference to your bottom line if you already saved $500 on a computer for example or $500 over a few months of regular trips to the grocery. You can actually redeem your cashback rewards regularly to buy things that you need.
Don’t let your cashback rewards go to waste. Put them to good use and you can enjoy bigger savings than what you could imagine!