The post Managing your finances when life throws you a curveball appeared first on Credit Simple.

Rewards credit card programs have exploded in recent years, offering everything from flights to merchandise to cash in your pocket. With so many options, it’s important to choose a rewards card that suits your lifestyle and preferences. Here’s how.

What is a rewards credit card?

Rewards credit cards typically work by letting you accumulate a certain number of “points” for every dollar you spend and you can later redeem these points for valuable goods and services like flights, household items or even cash back.

Many cards these days offer rewards from all categories, although it’s common for them to target a particular lifestyle. For example a travel credit card might offer travel and cash-back rewards but offer a better points-to-reward ratio when you use the points for travel.

The difference between rewards cards and perk cards

Don’t confuse rewards with perks like discounted movie tickets or free travel insurance. Rewards cards may contain perks like this, but cards can offer perks without having a points-based rewards system.

What types of rewards cards are there?

Here are the most common types of rewards cards, although many of them will offer rewards from multiple of these categories:

• Travel cards. These cards let you earn points redeemable for travel-related rewards like flights, hotel stays, cab rides, amusement park tickets and airport lounge access.
• Cash-back cards. These cards let you earn points redeemable for cash, usually in the form of a deduction on the balance you owe.
• Shopping cards. These cards let you earn points redeemable for merchandise raging anywhere from sporting goods to appliances to children’s toys.

It’s also possible to find cards that cater to specific hobbies. For example a golf rewards card might let you earn extra points when you use the card at a golf course and/or offer golf-related  rewards at a points discount.

How do you earn points?

There are several ways you can earn points using your rewards credit card:

• Being approved for a card. Some rewards cards will give you a lump sum of points just for signing up and being approved for the card. They may give you the points right away, or only after you have charged a specific amount to the card within a specific timeframe.
• Everyday spending. Most cards issue a certain number of points for every dollar you charge to the card. Some charges may not be eligible for points, for example, balance transfers.
• Spending on specific products and services. Your card may issue additional points, above and beyond the points you get for everyday purchases, when you use the card for specific products and services. For example, a travel card might issue additional points for every dollar you spend on travel-related purchases.

How do you choose the right rewards card for you?

Don’t just apply for the first rewards cards that offer a bunch of points just for signing up. Instead take your time to consider what you want out of a rewards program and how you plan on using your card. Here are some factors to consider:

• Will you pay your balance in full every month? Most rewards cards come with an annual fee, so if you plan on carrying a balance (ie, paying interest), consider skipping the rewards in lieu of a no-annual fee card instead. Otherwise, look for one with a low fee or that offers other valuable perks.
• What rewards are you interested in? Many rewards cards aim to appeal to certain types of people, for example travel cards are aimed at travelers, shopping cards are aimed at people who like to shop and cash back cards are aimed at the frugally minded. You’ll obviously want a card that offers rewards that actually excite you.
• Is there a cap on points? Some cards will limit the number of points you can earn every year. If you plan on using the card a lot, it might be worth seeking out a card with a higher cap or no cap at all.
• How much are points worth? You can make a rough estimate by noting the number of points it takes to get a particular item and then dividing that into the item’s monetary value. You can then use this information to compare the point value on a few different cards.
• How easy is it to redeem points? With some rewards, it might take several steps to redeem your points: for example, a travel card that lets you exchange your points for an airline’s frequent flyer miles, where you’d still have the extra step of redeeming those miles for your flight. If you’re considering a card, find out what the redemption process is and decide if you’re comfortable with it.

Bottom line

A rewards card can be a great way to extract additional value from your credit card, provided that you use the card responsibly and don’t rack up fees and interest charges that cancel out all that added value. Just make sure you choose a card that suits your interests and makes it easy to redeem and enjoy your rewards.

The information in this blog post is general in nature and does not constitute personal financial or professional advice. It is not intended to address the circumstances of any particular individual. We do not guarantee the accuracy and completeness of the information and you should not rely on it. Before making any decisions, it is important for you to consider your personal situation, make independent enquiries and seek appropriate tax, legal and other professional advice.

The post Choosing a rewards credit card that’s right for you appeared first on Credit Simple.

You don’t get much in this life unless you ask. That’s definitely the case with your bank, your insurance company and utility companies. There’s a lot of money to be made there. And if we’re lazy, companies can maximise their profits.

Don’t let that be you. By playing hard to get, or by ‘rate tarting’ (that’s shopping around for a better rate), you can have your loyalty rewarded.

Understand your spending

Before you storm into your bank or phone your insurance company, take time to work out how much you’re spending now and the number and nature of the units/calls/fees that go to make up your bill.

Perhaps you’re making numerous nationwide phone calls or eating up too many megabytes a month on your broadband plan and a prepay deal could save you heaps.  

Compare and contrast

Once you know what you’re spending a month, how many kilowatts of energy you use, what the interest rate is on your savings and all the other data, you can get your mouse out and compare your current deal.

Shopping around is made easy with comparison sites for lots of different things. If there’s no such site, then open a spreadsheet or get good old fashioned pen and paper out to do the comparison yourself.  

If there’s a new kid in town that’s advertising everywhere consider calling, or getting a quote online and see if you could do better. Sometimes their deals simply can’t be beaten.  

Ask for a better deal

Now it’s time to pick up the phone and call your provider to see what they can do to keep your loyalty. “Can you give me a discount?” or “that’s too expensive” are very powerful words in the English language. Remember it costs them a lot more to gain a new customer than keep you. So try your luck.

There’s one really important rule when playing this game: that’s never be rude if you want a better deal. Call centre staff are human and will be motivated to help you if you’re polite.  

If the call centre operator doesn’t have the authority to give you a discount ask if the supervisor has the discretion to give you a discount?” you might just be successful.

Find out if there are other ways to save

If your existing supplier can’t or won’t give you a discount, then move onto Plan B. That’s asking them for other ways to cut your bill.

These companies release new plans and accounts all the time and they can analyse your existing spending and find the best deal for your personal circumstances.

It may be that there’s a new bank account available with reduced fees or your accounts can be reorganised to stop you being pinged with honour and dishonour fees.

Be careful, however, that you read and understand the fine print. Does the new insurance policy you’re being offered have the same cover as the last or are you agreeing to a new fixed term contract that you can’t break?

If all else fails: walk

Sometimes you just need to vote with your feet. If the opposition is offering a better deal and you’re sure you’re comparing apples with apples, then move.  Hopefully your new supplier will value your new-found loyalty.

Do it all again

If you really want to win at this game, make a diary note to do it all again in 12 or 18 months time. Chances are there are better deals around again.

The post Does it pay to be a loyal customer? appeared first on Credit Simple.

You don’t get much in this life unless you ask. That’s definitely the case with your bank, your insurance company and utility companies. There’s a lot of money to be made there. And if we’re lazy, companies can maximise their profits.

Don’t let that be you. By playing hard to get, or by ‘rate tarting’ (that’s shopping around for a better rate), you can have your loyalty rewarded.

Understand your spending

Before you storm into your bank or phone your insurance company, take time to work out how much you’re spending now and the number and nature of the units/calls/fees that go to make up your bill.

Perhaps you’re making numerous nationwide phone calls or eating up too many megabytes a month on your broadband plan and a prepay deal could save you heaps.  

Compare and contrast

Once you know what you’re spending a month, how many kilowatts of energy you use, what the interest rate is on your savings and all the other data, you can get your mouse out and compare your current deal.

Shopping around is made easy with comparison sites for lots of different things. If there’s no such site, then open a spreadsheet or get good old fashioned pen and paper out to do the comparison yourself.  

If there’s a new kid in town that’s advertising everywhere consider calling, or getting a quote online and see if you could do better. Sometimes their deals simply can’t be beaten.  

Ask for a better deal

Now it’s time to pick up the phone and call your provider to see what they can do to keep your loyalty. “Can you give me a discount?” or “that’s too expensive” are very powerful words in the English language. Remember it costs them a lot more to gain a new customer than keep you. So try your luck.

There’s one really important rule when playing this game: that’s never be rude if you want a better deal. Call centre staff are human and will be motivated to help you if you’re polite.  

If the call centre operator doesn’t have the authority to give you a discount ask if the supervisor has the discretion to give you a discount?” you might just be successful.

Find out if there are other ways to save

If your existing supplier can’t or won’t give you a discount, then move onto Plan B. That’s asking them for other ways to cut your bill.

These companies release new plans and accounts all the time and they can analyse your existing spending and find the best deal for your personal circumstances.

It may be that there’s a new bank account available with reduced fees or your accounts can be reorganised to stop you being pinged with honour and dishonour fees.

Be careful, however, that you read and understand the fine print. Does the new insurance policy you’re being offered have the same cover as the last or are you agreeing to a new fixed term contract that you can’t break?

If all else fails: walk

Sometimes you just need to vote with your feet. If the opposition is offering a better deal and you’re sure you’re comparing apples with apples, then move.  Hopefully your new supplier will value your new-found loyalty.

Do it all again

If you really want to win at this game, make a diary note to do it all again in 12 or 18 months time. Chances are there are better deals around again.

The post Does customer loyalty pay? appeared first on Credit Simple.