Don't Let Your Credit Card Rewards Go to Waste

NEW YORK (TheStreet) -- Credit card rewards programs continue to proliferate, but so does the value of rewards left on the table by consumers. A recent survey showed that $16 billion in rewards points and miles go unused each year.

To avoid allowing your rewards to go to waste, the first concept to understand is minimizing the impact of rewards devaluation.

What is rewards devaluation?

Rewards devaluation is basically inflation for rewards points or miles. In other words, it's when your already earned points or miles become relatively less valuable because a greater number is needed for the redemption of certain goods or services. Unlike inflation, however, rewards devaluation isn't usually caused by macroeconomic forces, but rather by decision makers at the companies affiliated with the respective rewards programs.

Strategies to avoid devaluation:

Rewards programs tend to offer one of three rewards currencies: points, miles, or cash. A credit card company can easily devalue points or miles by changing how many it takes to garner specific perks, but the same cannot be said for cash. That means cash back credit cards offer the most straightforward, stable rewards available.

If you opt for a points or miles-based rewards credit card, you won't be able to eliminate the threat of devaluation, but you will be able to minimize it. You can do so by choosing a rewards card that allows you to redeem your points/miles often. This will ensure that a limited number of points/miles will be "at risk" at any given time.

While the rate at which points and miles are accumulated is generally listed very clearly on online credit card applications, according to Card Hub's latest Credit Card Application Study, consumers may have to look a bit more closely to determine how much they are worth and what the thresholds for redemption are. This information is integral not only to frequent redemption, but also to redeeming points/miles for maximum value.