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How to make the most of your rewards credit card

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Are you looking to prioritise your finances in 2020? Using your rewards credit card in the right way will allow you to manage your purchasing choices in a way that makes sense for your circumstances.

It can save and even earn money to put towards the things you want and need most.

Credit cards are more than just a way to make purchases

You can make the most of your money by choosing the right rewards card to use routinely and by making sure you handle your spending responsibly.

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If you review your options for rewards credit cards and select the right one that matches with your lifestyle habits and needs, you might find your rewards card can offer you additional rewards and perks beyond the typical redeemable rewards points program.

Start by selecting the rewards credit card that fits your current purchasing habits most closely, then carefully use your rewards points to maximise their value. Finally, discover what other benefits your rewards credit card offers you.

It might help you to find great deals, take advantage of discounts, and even qualify for free items, cashback, or credits to your statement.

Rewards program basics

What are rewards programs, how do they work, and what can you get from them? The most basic sort of rewards credit card allows you to accumulate points based on your spending. For example, for every qualified purchase, you could earn a point for each dollar spent.

You can save the points then redeem them in various ways, including:

For merchandise, including items like jewellery, watches, electronics, kitchen appliances, sporting goods, home and garden purchases, and more.

For travel experiences, including great deals on flights, hotel stays, car rentals, and venues or attractions.

There are also "hidden" or less known ways to redeem your credit card rewards points, including buying gift cards, or using a "select and credit" option.

This allows you to review your credit card statement online, select qualifying items, and redeem your rewards points for a credit back on your statement for the selected items.

If you have your credit card linked to your bank account, selecting "credit" instead of "debit" can let you accumulate points more quickly - just don't spend more than you can easily repay.

Dig into your financial institution's current rewards program, and find out if they offer these kinds of perks. If not, it might be time to go hunting for a new rewards credit card offer.

Investigate where you get the best sign-up deals

Many rewards credit cards have sign-up bonuses or other perks, like cash-back offers or low interest periods. You may also benefit from other perks, such as no annual fee for the first year (you could also ask if you can use your rewards points to avoid annual fees in upcoming years as well).

Many rewards credit cards will also allow you to transfer a balance from another card and give you a grace period at low or no interest while you pay off the balance.

Beyond rewards points

In addition to rewards point and sign-up bonuses, you may find your rewards credit card offers insurance options. You can protect yourself with cover such as:

  • Purchase protection for qualifying items against loss, theft, or damage soon after purchase;
  • Price protection with refunds up to a specified dollar amount of an item you buy when it goes on sale shortly thereafter;
  • Travel protection in case of booking cancelations or baggage loss.

Bank of Queensland's Blue Visa credit card - recently awarded Money magazine's Best Reward Credit Card 2020 - offers a low $60 annual fee, an interest-free period for balance transfers, travel insurance, purchase protection, rewards points, and $120 cash back when you spend $500 per month on retail purchases for the first three months you have the card.

This article is for general information purposes only and is not intended as professional advice, and has not been prepared with the financial circumstances of any particular person in mind. You should seek your own independent financial, legal and taxation advice before making any decision in relation to the material in this article. Terms and conditions apply to the Blue Visa Credit Card features and offers.

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Andrew Toone joined Bank of Queensland (BOQ) as general manager of product in 2015. He has more than 25 years' experience in banking and insurance, and has held senior leadership roles across actuarial, insurance, wealth, banking, finance, product and pricing functions. Before joining BOQ, Andrew spent 11 years with the NAB Group, where he held senior roles in wealth, corporate and consumer banking. Prior to this, he worked for AXA in the UK, Australia and Asia.
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