Whether it’s because of frequent flier miles that are impossible to redeem, overly complicated terms and conditions or reward credit cards with high APR’s, credit card reward programs are usually a rip off, according to CNN Money. Consumer Reports says that about 85% of American households participate in at least one rewards program which encourage consumers to spend more money but often turn out to be more trouble than they’re worth. To help you wade through the confusion, Consumer Reports has assembled 7 tips to help you make postive use of credit card reward programs. The list, inside…

7. Consider where you shop.
Lean toward cards that will earn rewards at stores and services you use frequently. For example, airline and hotel discounts won’t come in handy for those who aren’t frequent travelers.

6. Project your spending.
Try to figure out how much you will likely spend per year and translate that into cash back points or reward points. Then, calculate how far that gets you toward your desired reward. Don’t forget to subtract any annual fees. Move away from any card that makes you spend a small fortune for a minu
scule reward.

5. Favor Cash back.
Often times, points go unused which is a bonus for the credit card company. However, cash back will accumulate without you having to anything. Consumer Reports also found that cash back cards usually offer better rewards than point equivalents.

4. Do the math on do-good programs.
Charitable individuals might be attracted to reward cards that give to charities. However, the reality is that they usually pay very low rates. You would probably be better off going with a cash back card and donating the money yourself which would result in a larger donation and a tax deduction.

3. Skip credit card rewards if you carry a balance.
Since reward cards often have higher interest rates, the interest on the balance you carry will probably offset any reward. Look for a standard credit card with a lower APR.

2. Use airline miles fast.
If you manage to save up enough miles for a trip, use them quickly. You never know when one of the airlines will change their conditions or go belly-up.

1. Avoid temptation.
Research shows that credit card users will often spend more in their quest to earn points toward their shiny new prize, however, overspending for a freebie doesn’t make good economic sense.

If you think about, what credit card company is going to give you something free unless it is making them more money? These companies have have enormous hives of supercomputers and datajunkies working nonstop to make sure they’re making more money than they’re giving you in rewards.

Credit card rewards are a real rip off [CNN Money]
(Photo: Getty)

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