6 Things You Should Know About Credit Card Loyalty Programs

Lately it’s difficult to find a credit card that doesn’t include some kind of loyalty program. Many credit card companies offer their own rewards or team up with banks, airlines, hotels, grocery stores, and other retail stores to allow patrons to earn rewards on the items they purchase most frequently. This can all be to the benefit of consumers, who earn points, rewards, freebies, and upgrades just for buying the items they would normally purchase anyway.

That said, you need to take steps to understand your loyalty program so that you can make the most of it. Here are a few things you should know before you sign up for a credit card with a loyalty program.

1. Rate of Earning Points

Every credit card differs in its system of points or rewards calculations. In most cases, you’ll earn points or miles with every purchase, but the number of points you earn for every dollar you spend can differ in a variety of ways. These programs don’t tend to be terribly straightforward, so you’ll have to read the fine print. In most cases, you can earn different amounts for different purchases.

Say, for example, you have a card that’s linked to a particular airline. When you fly with that airline, you’ll likely earn more points than you will for other purchases. But you may earn certain amounts for flying domestically versus internationally.   You might earn extra points for using preferred travel vendors like hotels or rental car companies. In other words, you’ll have to do some research to find cards that offer the best rewards for the items and vendors you prefer.

2. Redeeming Points

There are also a lot of ins and outs associated with redeeming points, so again, it’s important to make sure you understand the rules. In most cases, you’ll need a certain number of points for certain redemptions, like airline tickets or hotel stays.

However, you may only be able to redeem points with specific vendors, there might be blackout dates, and there could be other restrictions. So long as you are aware of the limitations associated with redemptions, you won’t be caught off guard.

3. Types of Rewards

Some cards offer airline miles, hotel stays, travel upgrades, or other travel related rewards. Some offer discounts and gift cards to your favorite retail stores. Others provide catalogs full of consumer goods or even cash back. There’s a whole world of reward options to choose from, so you’ll want to comparison shop to find the credit card loyalty program that best suits you.

4. Partners

Some businesses partner with credit card companies to provide loyalty programs to their patrons. You might, for example, use a Kroger plus card to get the best deals at the grocery store. Or you may apply for a Toys R Us MasterCard in order to get points to use toward toy purchases for your children (or video games for yourself). If there are stores you shop at frequently, you should consider the benefits to be gained by signing up for the store credit card they offer.

5. Improving Status

There are always rules associated with improving your status, although you generally have to maintain a certain spending amount annually to become a gold or platinum member and get the best reward values. Understanding how to reach higher status levels within your chosen loyalty program could help you to earn the most rewards.

6. Minimums

Every credit card rewards program has minimums for redeeming rewards. You may, for example, need several thousand points to earn a hotel stay or an airline ticket. Knowing what the minimums are will help to ensure that you are able to redeem your points for the rewards you want.