1 in 4 Consumers Make This Costly Credit Card Mistake

A lot of people with credit cards are making this key -- and expensive -- error.

1 in 4 Consumers Make This Costly Credit Card Mistake Photo by Dean Drobot / Shutterstock.com

Racking up freebies and discounts — but not interest — with a rewards credit card is one of many perks of being financially stable enough to pay off your balance in full every month.

So, if you aren’t taking advantage of cash-back or travel rewards, you’re likely missing out on one of the great joys of a financially responsible life. Yet, many consumers struggle with credit card rewards, according to recent research from NextAdvisor.

A poll of around 2,300 folks in the U.S. who are 18 or older found that such rewards confuse 45 percent of consumers.

The situation is even worse for travel rewards:

  • 54 percent find frequent flyer programs confusing.
  • 47 percent find hotel loyalty programs confusing.

Many of these folks don’t know how many miles or points they have, either.

Perhaps worst of all, though, is that about 1 in 4 of consumers don’t know how to redeem rewards. That means an awful lot of cash back, miles and points are going to waste — an expensive oversight.

Grasping credit card rewards

There are two main remedies if credit card rewards confuse you. Both involve educating yourself about options. Start by learning about how your current rewards card works.

NextAdvisor suggests calling the card’s customer service department and asking questions. You should also be able to find answers by logging into your credit card account online.

Also, check out the article “15 Valuable Travel Credit Card Benefits You Might Be Ignoring.”

Finding the best rewards credit card for you

In some cases, your credit card itself might be the problem. Learn about other rewards cards to see if you can benefit from a different card. One way to compare options is to use Money Talks News’ credit card search tool, which is free.

For example, consider a cash-back credit card. My household loves cash-back cards precisely because they keep our day-to-day finances simpler.

Miles and points that you earn with a travel rewards card may expire or come with other restrictions — not to mention the defining restriction of being redeemable only for travel.

With cash-back cards, my household doesn’t have to worry about expiration dates or any other restrictions. We can spend the cash anytime, any place and on anything we please.

What about you? Tell us what you find confusing — or what you love — about your rewards credit cards by commenting below or on Facebook.

Karla Bowsher
Karla Bowsher
I’m a freelance journalist and former newspaper reporter who has covered both personal and public finance. I've worked for a top 50 major metro daily and a community newspaper as well as ... More

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