There are occasions when credit card users lose points, miles and cash back rewards. Here are five of the most common credit card pitfalls in this area.
Some credit card programs take away rewards if you don’t continue to use the card. For instance, the NFL Extra Points card from Barclay will the close account of cardholders who do not make a charge for six consecutive months.
Credit card loyalty programs have terms and conditions that allow companies to make changes with little notice. Most of the time, these changes result in rewards being harder to redeem, or requiring more points or miles.
Some credit cards have terms that withhold rewards when the cardholder makes a late payment.
Many airline frequent flier programs have expiration dates. For example, if American AAdvantage miles aren’t earned or used at least once in any 18-month period, the miles are lost. Card holders should keep track of loyalty points through the credit card company Website.
When the credit card issuer operates the rewards program, cardholders will usually forfeit rewards when their account is closed for any reason. This includes customers canceling their credit card as well as banks closing delinquent accounts.
Credit card users should be very cautious about accumulating vast sums of points and miles for more than a year or two.
Over one-third of credit card users are either unaware of or do not completely understand the benefits associated with their cards, according to the J.D. Power 2013 U.S. Credit Card Satisfaction Study. Study results indicate that 59% of consumers said they completely understand their card rewards. That’s a decrease from 66% in 2012.
Jim Miller, senior director of banking services at J.D. Power, wrote, “Customers who use their card’s benefits spend an average of $400 more per month on their card, compared with those who are aware of benefits but do not use them, so clearly this is an area of importance to card issuers.”
The study found that 53% of consumers did not completely understand the terms of their credit cards. Of that group, 73% said they were unclear about interest rates and 31% said they didn’t understand late payment fees.
J.D. Power has measured customer satisfaction with credit cards since 2007, analyzing six components: interaction; credit card terms; billing and payment; rewards; benefits and services; and problem resolution.
For the fourth consecutive year, the study shows an improvement in satisfaction with a score of 767 on a 1,000-point scale. The score in 2012 was 755.
In terms of the highest-scoring providers, American Express maintained its 7-year streak in the top spot with 816 points, as a result of its strength in rewards and benefits and services, the press release said.
Discover is second with 812 points, and Chase is third with 783 points.
Those who take advantage of credit card rewards and benefits enjoy such things as free or reduced air travel and free car rental insurance usually not available when paying bills with other types of plastic such as prepaid cards and debit cards.
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