Keeping credit card reward points

For some consumers, collecting credit card rewards, such as cash back, airline miles, clothing and gift certificates, is an added incentive to choose plastic over paper at the checkout.

However a new report suggests these rewards can be just as volatile as credit scores, hinging on the same types of consumer behavior.

Points can be wiped out by late payments, according to the report by Fox Business. The practice started 15 years ago and has since blossomed to an increasing number of cards. In order to redeem rewards, consumers may have to pay a reinstatement fee, which can be around $30.

“There’s a cost related to rewards programs, and when the issuers don’t see the payments coming in from the cardholder, they’ll stop access to that,” Richard Bialek, former senior vice president of consumer credit products at Visa told Fox. “It’s another revenue generator.”

To keep rewards the report recommended setting up automatic payments, which could also ensure you don’t harm your credit score, the news source says.

The report said more than 60 percent of consumers have credit cards that offer some sort of awards.

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