7 Things You Need To Know About Credit Card Rewards

2. Carrying a balance erases rewards

First of all, you should never carry a balance on a credit card. And rewards cards typically impose a higher interest rate than non-rewards cards, so if you are paying interest on a big balance, you’re more than offsetting any rewards you might be earning.

3. Be cautious about chasing rewards

Most of us have done it and lived to regret it. It’s easy to get in trouble when your credit card issuer offers you tempting bonus rewards if you make a certain number of transactions per month or hit a certain spending goal.

Those rewards are fine if they match your regular spending patterns. If, however, this type of incentive causes you to put more money on a rewards card than you normally would—or to buy things that are more expensive than you would normally choose—it means you are letting the rewards take control of your finances. And it’s just not worth it.

4. You can trade your rewards points

If you are short on the points needed to book a travel reward, you can trade and buy points on sites like points.com, which is free and takes about five minutes to join. Make offers to other members, barter your points for theirs, and haggle your way into that first-class seat to Des Moines.