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Making the most of your credit cards starts with making smart choices around which credit cards are right for you. In addition to finding the card that best fits your needs, it's beneficial to also consider what type of rewards you could be taking advantage of.

To make sure you're not leaving money on the table, here's what to look for (and what to avoid) in credit card rewards.

Assessing Annual Fees and Waivers

To begin with, take a look at the annual fees associated with the credit cards. Some premium credit cards' annual fees can range from reasonably low to quite large. Generally speaking, premium cash back credit card fees stay under $100, but there are always exceptions.

If you're interested in a premium travel credit card, those can be pricier – with annual fees often ranging from $400 to $500 or more. When considering these kinds of cards, carefully compare their levies against their benefits packages. For frequent travelers, the $450 annual fee on an ultra-premium card might be justified if paired with an airport lounge club membership worth $500. Don't forget about annual fee waivers - many premium cards waive fees during the first year, a potentially valuable perk for new cardholders.

If you don't expect to take advantage of the most valuable benefits, opt for a low- or no-annual-fee card. Likewise, if earning rewards is your top priority, look for no-annual-fee cards with above-average rewards programs.

Other Important Credit Card Terms and Benefits

Beyond the annual fee, pay attention to key credit card terms - regular APR, the costs for cash advances and balance transfers, overdraft protection (if applicable), penalty interest, and late and returned payment fees. Look for cards with terms that align with your known spending habits.

Pay attention to cards' additional benefits too. Major issuers underwrite a slew of potentially valuable benefits, such as complimentary rental car protection, purchase protection, travel accident insurance, and more. Spend some time looking through the benefits statements of a few different cards to determine what's included, important limitations, and potential out-of-pocket costs.

Accumulating Rewards Points

Look for cards that accumulate unlimited rewards points on everyday purchases - such as the Key2More Rewards® credit card, which is a great example of a broad-spectrum reward credit card. You'll earn 5 KeyBank Relationship Rewards® points for every $1 spent on eligible purchases, with no monthly maximum and the opportunity to earn bonus points based on your monthly spending.

You really want your focus to be on cards with optimal rewards that suit your needs and spending habits so that you're maximizing the benefit. By doing this, the rewards will add up quickly and be extremely valuable.

Understanding Redemption Options and Terms

Spend time researching the rewards programs and terms to better understand the optimal use of your points. Look for cards with a wide range of redemption options like cash back, gift cards, airline miles or general travel loyalty program currency, travel packages and experiences, and even merchandise.

Understand the mechanics of each redemption category. For instance, many cards offer multiple cash back redemption options, such as statement credits, bank account deposits, or even mailed checks. Pay attention to the minimum redemption requirements and processing times for each.

Likewise, know how much your points will be worth at redemption. Cash back redemptions often value points at $0.01 a piece, but other options may have widely divergent valuations, for better or worse.

Last, but not least, don't let your credit card rewards expire. More than 30 percent of American credit card users fail to redeem credit card rewards before they expire, negating all of the hard work they've done to earn them.

Pay attention to expiration horizons and understand what you need to do to ensure that you don't leave money on the table. Then, add a recurring appointment to your calendar to make sure all points are redeemed before the expiration date.

Choosing a rewards credit card isn't a decision to make lightly. Instead, it's better to take your time and choose a card that's right for you.

Disclosures

This information and recommendations contained herein is compiled from sources deemed reliable, but is not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or is offering any tax, accounting, or legal advice.

By selecting any external link on www.Key.com, you will leave the KeyBank website and jump to an unaffiliated third party website that may offer a different privacy policy and level of security. The third party is responsible for website content and system availability. KeyBank does not offer, endorse, recommend, or guarantee any product or service available on that entity's website.

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