7 Things You’ve Always Wanted to Know About Credit Card Rewards

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Michelle Schroeder knows how to make the most of her money.

Not only did the 25-year-old from St. Louis finish her undergraduate degree in just two and a half years, but she also bought her first house at 20—thanks to the savings she and her husband built up from working full-time in college.

So it’s no surprise that when she heard friends talk about redeeming their credit card points for free trips to Europe, the fiscally responsible overachiever wasted no time signing up for a rewards card of her own.

“I’ve always had good credit, and I pay my card balance in full each month,” she says. “So I figured I should switch to a card that gave me something in return.”

When she did, Schroeder started reaping the rewards immediately.

After being approved for a cobranded airline credit card, she snagged 50,000 “sign-up bonus” points that she combined with the 40,000 she’d already accrued by flying with the carrier the previous year. The result: a total of 90,000 points she cashed in to fly herself and five friends to Las Vegas—for free.

Hank Lobel, a CFP® at LearnVest Planning Services, says Schroeder is a shining example of how to smartly use a rewards card. “If you have good credit—and a proven track record of being responsible with credit cards—you’d be crazy not to take free money,” he says.

But these benefits also come with caveats—and aren’t always as good as they may seem. “Knowing the fine print that a lot of people miss when signing up can help you watch out for the ‘gotchas’ that come along with the ‘gimmes,’ ” Lobel says.

To help you distinguish between the two, we tapped Lobel and three other money pros to reveal some of the most common rewards card misconceptions—and insider tips for reaping the biggest benefits.

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