Reward Yourself with Your Credit Card

A credit card is like a power tool-if mishandled, it can inflict serious harm. When used properly, however, it produces beautiful results, such as a credit card rewards program.

The most competitive sport can't hold a candle to the ongoing battles in the credit card marketplace. Every day, credit card companies wage war for greater market-share, and consumers reap the benefits. Case in point: rewards programs.

The programs are designed to increase credit card usage by providing rewards every time a customer breaks out his plastic. The rewards are varied, and include such items as airline tickets, free gas, or discounts toward the purchase of a new car. Here are some tips to help you find the program that's ideal for you:

Rewards should resemble your lifestyle

Do you enjoying traveling? Do you like to eat at restaurants, or prefer shopping in a particular store? When you compare rewards programs, make sure you pick the one that's synchronized to your lifestyle. For example, if you like to travel, you'll want to go with a program that gives plane tickets as a reward. Don't just choose any airline, however. Pick one that uses a nearby airport as its hub, or choose a program that lets you use rewards points with any airline.

Charge everything, all the time

To make the program work, you need to build up rewards points by using your card as much as you can. Charge everything from a gallon of gas to your monthly cable bill. Over time, the points add up. As a bonus, most credit cards provide you with an itemized expense report, which you can use for budgeting purposes.

Pay the piper monthly

These rewards programs pay off for credit card companies when you fail to pay your entire monthly balance and get hit with a finance charge. Don't give them that pleasure-or profit. Pay your entire balance every month. Avoid rewards cards with hefty annual fees, and never buy something simply to gain more points.

Read the fine print, again

Rewards programs tend to have many restrictions. For example, if you're considering a travel rewards card, read the agreement's fine print regarding valid travel days. An airline might only allow you to redeem points during their least busy times, which probably won't fit your schedule. Every program will have limits. Study them carefully.

Keep your credit clean

Credit cards companies don't take kindly to late payments. Most eliminate rewards points for the month, and if you default on the card, you could lose all the points you've worked so hard to accumulate.

Rewards are plentiful when you use your card correctly. Match the program to your lifestyle, pay off those monthly balances, and be aware of any rules and restrictions. If you take a smart approach to the credit card program, you'll reap plenty of rewards.