Posted on April - 15 - 2010
Credit Card Rewards Can Help with Debt Reduction
You’ve wracked up a lot of credit card debt in the past, but have turned over a new leaf. A solid debt reduction plan is in place and you have stopped using credit cards for new purchases. But did you know that the very credit card that has contributed to money problems could help your debt reduction plan?
Credit Card Rewards Balance
Credit card rewards plans usually allow you to accumulate points each time you make a purchase. Many people sign up for rewards plans but never look at their points balance. If you haven’t checked out your balance lately, it’s time. You could have thousands of points that can be used for rewards. It’s also important to use rewards points before they expire.
Cash vs. Stuff
Although many of these rewards plans offer goods you can buy, why not convert those points to cash and apply them to credit card debt. Every litte bit you can put toward debt reduction helps.
Gift Cards Help with Debt
Another alternative is to use points to purchase gift cards that can be used for groceries, gas, or other necessities. Let’s say you spend $100 a month on gas, but have gift cards to cover it, you could use the money you normally spend for fuel to help with debt payments.
The Cost of Rewards Programs
It’s never a good idea to run up credit card debt just to accumulate rewards points since it usually takes a lot of them to actually receive anything worthwhile. For instance, if your rewards program gives you a point for each dollar spent, and it takes 3,000 points to get a $25 gift card, you must spend $3,000 for that reward. That’s not such a great deal. But if you already have unused points, go ahead and cash them in to help with debt.
Similar Posts:
- Credit Card Debt and Rewards Programs
- Is a Big Credit Card Sign-Up Bonus Worth It?
- Time to Cash in Credit Card Rewards
- Basic Terms You Should Know Before Applying for a Credit Card
- Pros and Cons of Paying of Taxes with a Credit Card
