One suggestion to all of you who have accumulated airline miles and credit card rewards. Redeem now. Here’s why:
• These points/rewards/miles earn no interest. Keeping them for longer time periods does not increase their intrinsic worth. There are no loyalty bonuses either for keeping them.
• Airline miles and reward points expire if unutilized for a period. This could range from one–two years.
• As a customer, you have little control over what the points can fetch you. A couple of years ago, 500 credit card reward points could get you a shopping voucher for Rs500. Now, in many cases, this has become Rs350.
• The service provider is free to redefine the boundaries of award and usage.
• Lastly, the laws of inertia work here too. When you shift residence or change your card/airline, you simply forget the 500 points or 8,000 miles residing somewhere that’s destined for a leisurely sunset.
Get down to redeeming the points. It is easy. Most service providers give you an option to do so through the Net. What are you waiting for?
Incidentally, urban legend in the US has it that there are over 10 trillion outstanding frequent flier miles. If all US fliers were to redeem their points, it would be a bigger blow than even 9/11!
Keep the plastic elastic
While buying big ticket items with your credit card, time your purchase so that you get a longer credit period. For instance, you could use your card to make a purchase at the beginning of your billing cycle. The minimum amount due is generally 3-5% of your total amount due. Don’t carry forward your balance: The interest you will have to pay on the unpaid amount could be as high as 40%.
Most investors concentrate more on the rate of return. But actually, there are two basic principles you need to get right if you want to be rich. Start saving early—because the number of years you hold on to your investment will be the winning factor. The second is how much you manage to save regularly.