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Credit card issuers making rewards harder to get

NEW YORK — Just as interest in cashing in credit card points for an iPod or airline tickets is likely to ratchet up, banks that issue cards are making it harder to redeem those points.

"They're certainly raising the bar on redemption thresholds and return rates," said Jonathan Silver, chief executive of Affinity Solutions Inc., a New York company that develops and manages rewards programs. The weak economy is pressuring card issuers, and one way to reduce costs is to increase the number of points needed to redeem rewards, he said.

There are steps consumers can take to maximize rewards, but advocates warn rewards should not be the focus for those who carry debt on their credit cards.

"People that don't pay off their balance every month really want the lowest interest rate and the lowest fees," said Ed Mierzwinski, a consumer advocate at the U.S. Public Interest Research Group.

Whether you're looking for a new card or trying to take advantage of the rewards programs on your existing cards, there are steps to maximize the returns:

• Check the fine print of the rules, said Ben Woolsey of Some cards come with limits on the number of points, amount of merchandise or how much cash back a holder can get each year, he said.

• Some cards offer more points or a higher percentage of cash back for certain types of purchases, like gas or groceries. Others offer incentives for buying certain things at specific times of the year, like home-improvement shopping in the spring.

• Points on some cards expire after set periods of time, so make sure you know expiration dates.

• Making late payments or going over your credit limit could result in a freeze on a rewards program until your account is current.

• Choose a card with no annual fee. Some fees begin after the account has been open for a year.

Credit card issuers making rewards harder to get 01/20/09 [Last modified: Tuesday, January 20, 2009 10:51pm]
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