credit cards

6 ways to spoil your cash-back rewards

Being a bad credit card user
Being a bad credit card user © Catherine Lall/Shutterstock.com

Credit card companies want cardholders who pay on time and use their cash-back cards often. If you don't, they'll take your rewards.

Becoming delinquent on your credit card account is one good way to forfeit cash-back rewards that you have earned, says Linda Sherry, director of national priorities at Consumer Action, a consumer advocacy group. The best way to know your card's policy is to check the fine print that explains how the rewards program works and the consequences of late payments, she says.

If you plan to transition to another rewards card because it suits your financial habits better, make sure to redeem all the cash back on your old one before you close the account. Otherwise, you'll sacrifice the rewards, Ulzheimer says.

However, if you plan to keep the old one open for occasional purchases, use it once every quarter to keep it active. Credit card companies will close an unused account, says Ulzheimer, and your rewards will be lost.

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