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Credit card rewards can pay off if you do the math

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The $1,000 Challenge is sponsored by Zip Mortgage powered by Zions Bank. Visit zionsbank.com/zip. Loans subject to credit approval, terms and conditions apply. NMLS 467014. Equal Housing Lender.


SALT LAKE CITY — There’s nothing quite like the feeling of getting something for nothing, right? It’s satisfying when you can wear that sly smile that says, “I beat the system!”

But when it comes to credit card reward programs, sometimes called “points,” beating the system requires doing your homework and knowing when to pull in the spending reigns.

That’s according to Coby Hafen, Division Manager of the Bankcard Unit of Zions Bank.  He told KSL Newsradio’s Dave Noriega and Debbie Dujanovic that paying off your credit card balances each month is the most important tool you have in your arsenal. “Anything you may earn on the rewards side, the benefit quickly gets offset with interest charges,” Hafen said.

But he also says that credit card reward programs can be beneficial. You just have to do some homework.

Make them work for you

Google ‘credit card reward systems’ and you’ll find there are dozens of them. In fact, almost every major credit card offers them. The trick is to find a rewards program that works for you. For example, if you accrue points month after month only to find that you can only use them for a hotel room in the middle of nowhere, that probably won’t work for you.

“Think about what you like to do,” Hafen says. It may be that your credit card company breaks down your spending into categories. Take a look at those categories, and then compare them to the rewards programs the credit card companies are offering. “Understand where you spend the most so that you can accrue certain points.”

Keep tabs

Even after you find the reward program that works best for you, Hafen says you have to stay on your toes and keep track of whether the reward categories have changed. And if the categories have changed you might consider switching to a different rewards program. A study conducted by J.D. Power & Associates in August found that 47% of people who switched credit card companies did so because they wanted better or different rewards.

Most of all, pay off your cards monthly

To recap, find the reward program that works best for you. Pay attention to your statements and act fast if you find that the reward program you signed up for is changing or going away. But the most important thing consumers can do to manage debt is to pay off of credit card balances every month. “You can purchase alerts on many cards, reminders on when payment is due and what you owe,” Hafen says.

On top of that, yes, there are apps for that.

Learn more

Hosts Dave Noriega and Debbie Dujanovic dove into the topic on this week’s Right on the Money segment. Listen below.

The $1,000 Challenge

Join our secret $1,000 Challenge Facebook group, where you can share your progress toward $1,000 in savings, get tips from others, and share tips of your own.

Dave & Dujanovic can be heard weekdays from 9 a.m. to noon on KSL Newsradio. Users can find the show on the KSL Newsradio website and app, as well as Apple Podcasts and Google Play.

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