Maximizing Rewards

Shopping this holiday season can be very rewarding. This is the perfect time of year to rack up points, miles and get cash back through loyalty programs. Kelli Grant, Senior Consumer Reporter for SmartMoney.com has some tips on how to maximize your benefits with a smart plan of attack.

You can generate several types of rewards in one transaction. Start by signing up for the store or brand's free loyalty program. Pay with a rewards-earning debit or credit card. And when you're shopping online, use a rewards portal like Ebates.com or ThankYou.com as a starting point to link to your favorite retailers. Someone spending $100 at Toys R Us could get 10% back from the store program, 2% back from Ebates and 4% back with a Chase Toys R Us credit card.

Don't chase credit card rewards if you're carrying a balance. Points or miles are worth about a penny each, and even a month's interest is going to offset any rewards you earn. Rewards cards tend to have higher interest rates, too, so you're doubly hurt.

Whatever you do, don't redeem your points or miles for merchandise. At Best Buy, an 8GB iPod Touch costs $230, and at Citibank's ThankYou.com, it's 37,100 points. That same point total is enough to get you $250 in Best Buy gift cards. You'll have $20 store credit left over, and enough extra points for $50 in iTunes cards.

Redeeming points for gift cards is usually the best use of your points. Even on cash back cards, you might get a bonus for doing so. At Discover, for example, $20 cash becomes a $25 Borders gift card. Cash is more expensive per point, but it's a better option if you don't like the retailer selection.

Be wary of programs or credit cards that require a fee for participation. There are plenty of great rewards cards that don't carry an annual fee. For store programs, keep in mind that you'd have to be a big spender at that retailer to offset the cost.

For more information on maximizing your rewards and other consumer tips click here.
Kelli Grant & Erika Wortham