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Best ways to redeem credit card reward points

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Nearly every credit card offers some type of reward, but knowing the best way to spend those reward points takes a strategy.

You will want to figure out how to get the most valuable reward for the fewest number of points.

"One cent per point is kind of the bare minimum that you can get. You want to try to go higher, so you can get as high as two and a half cents per point," says Personal finance expert Gerri Detweiler of Credit.com.

Using points to get a cash credit on your statement is typically one of the worst ways to spend your points, according to Detweiler. If it takes 20,000 points to get a $100 credit, you are only getting a half-cent value per point.

Also, using reward points to get merchandise is typically not a good value.

"A lot of the credit card reward programs offer a shopping option where you can buy merchandise. But you typically only get about one cent per point and the merchandise is at full price, so if you shopped elsewhere and looked for a sale, you would probably do better."

Detweiler says with reward points you will usually get the most bang for your buck using them for travel, especially luxury travel. Hotel rewards can offer some of the most lucrative deals.

"Sometimes there are cards that may offer bonuses for certain types of purchases or rotating categories of higher rewards. So, knowing what each of those cards in your wallet is offering is one way to maximize those rewards," according to Detweiler.

Also, keep in mind that reward points can expire.

Unclaimed points will usually disappear if you cancel your credit card, so use them before closing a credit card account.

If you miss a payment, it's typically spelled out in the fine print that you will forfeit your reward points.

Donating reward points to charity really isn't a good use of points for one primary reason, since you don't pay for reward points the IRS doesn't consider your donation tax deductible.

Copyright 2014 WFLA. All rights reserved.


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