3 tips: Maximizing cards rewards

NEW YORK (CNNMoney.com) -- There will be no more double-reward points from American Express, according to a recent announcement. And one expert we talked to said it's only a sign of what's to come in reward- card programs.

We'll give you the lowdown on what you need to know about reward programs and sorting through all those credit card solicitations.

Cut through the clutter

When it comes to reward cards, there are generally three types of programs: point-based programs, like the one from American Express, cash-back programs, and, of course, frequent flier reward cards.

Everyone gets pitches for reward cards. And we mean EVERYONE. Even pets! Last year over 6 million credit card solicitations were sent out. You alone probably received about 72 offers.

Point-based programs, which let you accumulate points with your purchases and choose your reward through a catalog, are being scaled back.

Meanwhile, more card issuers are offering bigger cash-back rebates for everyday items such as groceries or toothpaste.

For most people, cash-back cards are the way to go since they just don't charge enough to get a free airline ticket - in most cases, you'll have to spend $25,000 a year to earn a domestic flight.

Plus, with the trouble the airline industry has been in, airlines are more likely to raise fees and restrictions on when you can fly.

Get a magnifying glass

Point-based programs aren't such a great value, either, since items in reward catalogs are usually way overpriced, according to Curtis Arnold of CardRatings.com. "If you spend $10,000, you'll get 10,000 points. But in the end, if you're only getting a toaster oven, you're getting shafted," he says.

Yes, it's all in the details. With cash-back cards, you may have to spend a certain amount annually before you get the advertised rebate. In some cases, that can be over $6,500 a year. And beware of caps! There may be a limit to how much you can get back. In some instances, you may be limited to $300 a year.

You also need to get the details when it comes to redeeming your points. Cards may give you a timeline to cash in points. And sometimes you'll have to pick up the phone and call the company to get your rebate check.

Also, don't forget that issuers can change their policy at any time to increase fees or limit rewards with only 15 days' notice.

Tools for negotiation

The credit card industry pays up to $200 to acquire a single customer. In other words, the ball is in your court.

If you have a reward card, or are in the market for a card, you may be able to eliminate some fees by negotiating with your issuer. About 75 percent of cards have some kind of reward program, according to Ben Woolsey of CreditCards.com. So these cards are competing hard for your business.

"Almost anything the consumer doesn't like, they can request relief and card issuers are fairly flexible because it costs so much to acquire a new customer," says Woolsey.

To do some credit-card comparisons of your own, check out some of these Web sites: CardRatings.com, CreditCards.com and CardWeb.com.

http://money.cnn.com/2006/08/09/pf/saving/toptips/

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