Earning Points from Credit Cards
One of the benefits in using credit cards is earning points as part of the rewards system. When you make charges to your card, the credit card company will give you points. When you collect enough points, you may exchange the points for vouchers at major shopping centres or even free hotel stays. In the beginning, I could not really use my points because I did not earn enough points. It was only later I learnt how to maximise my points.
- Combine points with one bank
- Choose rewards you have a real use for
- Use your card for insurance/tax payments
- Use your card for investments
- Look for the best deals
- Combine expenditure with supplementary cards
- Offer to pay first in group settings
- Check when points expire
1. Combine points with one bank that offers the best deals
Having many cards may be advantageous as different cards from different banks offer different privileges and discounts. However, when it comes to earning points, it is best to combine the points with one bank. You may hold a number of cards with the same bank, and they will combine the points. This helps you to have enough points to exchange for useful vouchers. Choose the card that offers you the best bonus systems. Some cards allow doubling of points compared to other cards from the same bank. Different banks have different ways of calculation.
2. Choose rewards you have a real use for
Some banks offer overseas hotel stays, which sound tempting and exciting. However, they usually offer only a one night’s stay excluding airfare. You will have to fork out additional expenses and sometimes they have stipulations on when you can use the vouchers. It would be better if you choose dinning vouchers at restaurants you already go to, or better still, shopping vouchers at major departmental stores. Use the vouchers to buy things you need.
3. Use your card for insurance/tax payments
Insurance and tax payments can be rather hefty. Make full use of your credit card to pay for these bills. One bank allows me to use the Internet banking service to pay for my insurance and tax payments using the credit card, instead of deducting from the savings account. Find out more from your own bank.
4. Use your card for investments
Some online investment portals allow you to choose the method you want to pay for your investments. One particular investment portal allows me to put money into a cash fund which works like a term deposit, but without the fixed period. I can withdraw the cash at any time without any penalty and I get a decent interest rate. Technically speaking, I can deposit the cash, withdraw it, and deposit the cash again using my credit card repeatedly to earn points. The drawback is the investment portal takes some time to transfer money. You must also ensure you transfer enough money to your credit card so that you will not go over the credit limit.
5. Look for the best deals
Different shopping centres offer different deals. Some require more points for the same amount in terms of vouchers. Do a simple calculation. Usually, the greater the value of the vouchers, fewer points are required. However, it may not be true, so do check carefully. Sometimes, it may be better to have 5 $20 vouchers than 2 $50 vouchers or vice versa.
6. Combine expenditure using supplementary cards
If you have a partner, you may want to consider using supplementary cards. When two people are using the cards, you earn bonus points at double the rate. Of course, whoever is paying the bill must work out the terms with the other partner to avoid any unhappiness in the future. Money can be a major source of friction between couples.
7. Offer to pay first in a group setting
When two people eat at a restaurant, it may cost them $100. When 6 people eat at the same restaurant, it could cost $300. Since most of the restaurants do not offer separation of bills, take the chance to pay first, if you are with a close group of friends who will not default on such payments. When they pay you cash, you do not need to go to the ATM to withdraw money and you get to earn points too. The only drawback is you must not spend this amount before you pay the credit card bill. Money management is important.
8. Check when points expire
Make sure you know when points expire. Do not let the bank use your points to waive off charges (more on this at another time). You may have to do some trial and error matching to get the most out of your points. Many banks do not allow you to rollover the points, especially when they have expired. You may want to call up the customer service though.
Sarah Tan – SingaporeProfit.com
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