Understanding Your Credit Card Rewards Program

NEW YORK (MainStreet) — If you're like a lot of people, you have trouble understanding your credit card rewards program. Not understanding how a credit card rewards system works can defeat the purpose of having one: after all, why let all those points add up if you're not going to use them? We spoke to some credit card experts about how to understand your credit card rewards program so that you don't leave points lying on the table.

Is Your Plan Valuable?

Randy Hopper, vice president of credit cards at Navy Federal Credit Union, says that about two-thirds of people let their travel points expire. "You need to make sure that your card isn't just valuable from a rewards perspective," he explains, "but also that it's valuable across the board."

First and foremost, the card's value should be easy to understand. "You should be able to understand your plan without a degree," he says. "How flexible the plan is is key. It might look valuable, but could be very limited in terms of when or how you can redeem points."

Matthew Goldman, founder and CEO of Wallaby Financial, a company with an app to help you get the most out of your credit cards, reminds people that the terms and conditions for a rewards program won't be with the cardholder agreement, but somewhere else.

Different Kinds of Points

Points are accrued in different ways. "There are basically two kinds of points," says Goldman, "the kind where you earn one point and that's it and another where there are bonus points." There are also points systems with changing terms. Goldman recommends that people sign up for notifications from their credit card company.

"If a company changes its rewards program on a quarterly basis, there's usually a whole new set of fine print involved," he explains. What's more, you might even have to opt into each bonus points program on a rolling basis.