Taking advantage of credit card reward programs

This is definitely the best time of year to use your credit cards to take advantage of credit card reward programs. The best way to maximize your rewards is to check out the website and see the terms and agreements. If you prefer not to read, then you can always call the customer service number and ask them if there are any special offers by using their credit card this month.

Richmond Times Dispatch:

Card issuers have been ramping up the incentives lately, says Bill Hardekopf, CEO of LowCards.com and the author of "The Credit Card Guidebook." This means you might be able to put an extra $50 or $100 in your pocket. Here's how:

• Use extra spending to your advantage. If you're going to spend hundreds of dollars, you might as well get a little gift for yourself in the form of cash back. There are two cards that are offering big cash-back bonuses right now if you hit a certain spending level, Hardekopf says. One is the Chase Freedom Visa, which gives you $100 if you spend $799 within the first three months that you have the card. The other is the Discover More card. With that, you'll get $100 for spending $500 within the first three months.

• Select your cash-back categories wisely. A fairly new trend in rewards cards is extra cash back in certain categories. Sometimes they rotate and are chosen by the card issuer, but sometimes you can select them yourself. They often include things like additional cash back at drug stores, department stores, grocery stores and gas stations. It's worth investigating because you may be able to opt to get extra points by targeting your rewards to the categories where you plan to do your shopping. Selecting to get additional bang for your buck at a department store, for instance, would probably be a good choice during the holidays.

• Be pre-emptive. It's great to get a little cash back after the holidays that you can put toward paying off your bills, but it's even better to just spend less out of pocket from the start. If you already have points accrued from your spending throughout the year, now's the time to use them.

• Be careful with store cards. Store cards seem to be handing out more lucrative rewards than ever, says Ben Woolsey, director of consumer research for CreditCards.com. Still, you want to tread carefully, particularly if you're going to be shopping for a major loan in the near future. Store cards are notoriously bad for your credit score, for three main reasons, according to John Ulzheimer, a credit expert at Credit.com.

For one, they have low credit limits, which means even modest purchases will result in a high utilization ratio of that card. Retail inquiries are also among the most damaging kind in the eyes of creditors, and adding a new account to your mix will bring down the average age of accounts on your credit report (you want as long a history as possible).

Be sure  to only charge what you have budgeted for, otherwise, you will be in for a shocking reminder come your next statement.  Happy holidays!