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Use your credit card points wisely

Most cardholders fail to notice the usage of reward points that they accumulate, writes Arnav Pandya.

india Updated: Jan 17, 2008 20:13 IST

Most cardholders pay attention to the interest rate charged by their credit card and other operational issues. What they fail to notice is the usage of reward points that they accumulate. Many times these are just left standing in the account and sometimes even lost when the card holder changes over to another card. However there are ways in which a person can ensure that they are able to make the best use of the rewards available to them.



Know you points


The first thing to do is to know the amount of points that you have accumulated. Every statement usually mentions the number of points that have been accumulated by the person and any addition or subtraction from the balance because of further spends or usage. This has to be identified and one must take a regular look at the extent of points that can be actually used.



Check the benefits


Next, check the benefits that a person will get when they want to redeem the points. There might have to be a minimum number of points collected before any redemption can be done. This will require a person to go to a certain level of spending and accumulation before they can start with their redemption process. Depending upon the usage, there might be different categories for redemption. This will also vary with the kind of redemption benefits available for the person and hence they can act accordingly.



Automatic conversion


In case of several card companies one needs to undertake this kind of decision since there is automatic conversion of points into a specific area. A very good example of this is the conversion of points into air miles with a particular airline. There might be some variations in this and hence this has to be taken into consideration because then a lot of the effort is spared in deciding what the points have to be converted into.



Cash required


Even while the points are being redeemed it is necessary to take a close look at what is happening because some of the items will have a cash payment along with the usage of the points. This means an extra expense and one must take this into consideration while making a decision on the choice of items. Sometimes it might be just better to purchase the item and use the points in some other area.