Rewards credit card are designed to “reward” consumers for their loyalty by returning something to the cardholder; There are many bonus programs including points, cashback, frequent flyer miles or merchandise. Reward credit cards are constantly improving because this is how credit card companies compete with each other to get new customers and retain their clients.
While all rewards credit cards look great at first glance, it’s important to do a little in-depth research for each of them before selecting one. Whatever you miss in the minute details might reward your reward card for a credit card lender instead of your wallet!
Avoid high interest rewards credit card.
Rewards cards are not rewarded if you have credit from month to month. When using a rewards credit card, it is customary for the card to have a higher interest rate than a non-reward credit card. If you hold balance from month to month instead of paying it at the end of each month, you are unlikely to earn anything from the rewards after paying the interest.
What does “even” mean? You know you’ve seen it. Credit cards that advertise a “up to” 1% cashback. This means that you may actually earn less than 1% of the cash until you reach very high levels of spending on your card.
Check the rewards are really worthy.
How much do cardholders pay for rewards? Most credit card shoppers compare the points earned on different reward cards, or the gift cards they receive. The best thing you can do is know how much these points or rewards cost the cardholder. If you have to spend $ 10,000 a year to get a $ 50 gift card – is it really worth it?
Choose the suitable reward card for your spending level.
Frequent Flyer Miles are great reward programs for people who make a lot of purchases on their credit cards. If not, it will wait years before you can qualify for your free trip. If you are an occasional spend with credit cards, you will likely look at credit cards that offer rewards with lower spending levels to take advantage of the rewards.
Understand what a gas station is. Gas rewards credit cards are very popular now as the price of gas continues to increase. They are also very generous, keeping in mind that many will offer up to 5% on all gasoline purchases. But the only way to get money back from gas purchases on most of these cards is if you made a purchase at a “real gas station”. Supermarkets, wholesale clubs or other locations may not comply with the card guidelines and will not earn much money.
Compare the benefits and annual fee.
The annual fee will cancel the purpose of the rewards card. Habit. If you have to pay $ 30 a year to get a reward card, you will likely have to spend $ 3,000 before you earn any rewards. However, if your reward card offers double points or frequent flying miles, it may be worth the annual fee. It all depends on how much you use your credit card.
Check the rewards limit.
The rewards have their limits. Make sure you understand the maximum reward earnings, especially if you are someone who uses credit cards a lot. If your gas card gives you a 5% cashback on gas purchases but it stops paying you when you reach $ 300 in gas purchases, search for all the rewards you have wasted due to their maximums. Also, keep in mind that some rewards will expire if you do not use them within a specified time period.
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