Every 12 months, tens of millions of dollars in bank card rewards go unclaimed — money that may very well be covering travel, on a regular basis expenses, and even money back in your pocket. When you’re not redeeming those rewards, you are leaving money on the table.
As someone who leverages bank card rewards, I used to be somewhat surprised by the recent Bankrate survey revealing that 25% of Americans didn’t redeem their rewards last 12 months.
That represents big money. For instance, in 2022, consumers using general-purpose bank cards from major issuers earned greater than $40 billion in rewards, in keeping with a 2024 Consumer Financial Protection Bureau report. “Issuers forfeit, expire, revoke, or otherwise take away a whole bunch of tens of millions of dollars in earned rewards value every year,” the agency said.
With a lot content from social media influencers to financial experts highlighting these advantages, the actual issue is not just awareness; it’s execution.
Knowing in regards to the reward programs is one thing, but implementing is what actually matters. Like all other aspect of monetary planning, with out a strategy, these perks may go unclaimed.
Listed below are some key points for consumers to know.
Neglected value of bank card rewards
Many consumers join for bank cards without thoroughly reviewing the rewards structure and advantages. Financial institutions often bury perks in high-quality print, making them easy to overlook. Many individuals consider rewards as a “bonus” reasonably than a tangible financial asset that might offset expenses.
Unlocking hidden advantages
Beyond standard rewards, many bank cards often offer embedded perks corresponding to travel insurance, purchase protection and exclusive event access. These advantages offer cardholders added security and savings beyond traditional points or cashback.
Understanding which card offers which profit might help maximize the worth of your bank card and stop you from leaving money on the table.
My family’s real-life success story
I would like to share a private experience to point out how easily missed bank card perks could make an actual difference.
Several years ago, my son received an iPad as a Hanukkah gift from his grandparents. A number of days later, at his brother’s hockey game, he put it down for only a moment to have a good time an enormous win — and immediately, it was gone.
He was heartbroken, and my in-laws were frustrated, assuming it was gone for good. I encouraged them to ascertain the advantages offered by the bank card they used to purchase it.
After a call to the financial institution, they found the bank card they purchased the item with had purchase protection, which might reimburse you for recently purchased items which are stolen or damaged.
Because of that, the associated fee of the iPad could be reimbursed to them after they submitted some paperwork. Inside weeks, they got their a reimbursement, allowing them to exchange the item. It was a fantastic reminder that so many persons are unaware of assorted perks.
Knowing what your bank card offers can turn an unexpected loss right into a precious lesson and soften the financial impact.
Consumer takeaways
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- Bank card perks aren’t nearly points and cashback — they provide hidden protections that may save consumers hundreds.
- Ignorance is dear. When you’re not using your perks, you are effectively giving a reimbursement to the financial institution; especially if you could have a credit with a yearly fee.
- If a newly purchased item is lost or stolen or if an expensive item breaks after the warranty expires don’t assume you might be out the cash. When you paid with a bank card, reach out to your financial institution to ascertain for possible coverage via embedded purchase protection and prolonged warranties.
- When you run into a problem on vacation — corresponding to a delayed flight, lost luggage, or canceled reservation — and also you booked the trip on a bank card, call the issuer. Chances are you’ll have the ability to get reimbursement from embedded travel insurance that can cover your losses or unexpected expenses.
- When you’re concerned about accumulating a balance you’ll be able to’t pay in full at the top of the month, consider making weekly payments or paying off large purchases immediately. This approach means that you can leverage the advantages, protections and rewards of a bank card while maintaining the discipline many find in using a debit card.
— By Lawrence D. Sprung, an authorized financial planner and founder/wealth advisor at Mitlin Financial Inc.
