Credit Card Rewards Decoded
June 10th, 2008 | by admin |
Credit cards are everyone, and because of this, many credit card companies compete with one another by offering new and exciting rewards to their cardholders. With all of the rewards, it can be hard to understand what to do to earn those big snazzy prizes listed on websites and credit card advertisements. However, if you keep a level head and know what to look for, credit card rewards will not only be easily decoded, but you can be sure to find the right rewards for you.
First off, it’s important to know that not all rewards cards are right for. Many credit card companies bank on the fact that their customers will not use the rewards they receive or will not spend enough to earn the reward. Thus, it’s important to know what goes into earning and using the rewards advertised by a credit card.
Secondly, it’s important to look into the interest rate of your credit card. Many credit cards have higher interest rates on rewards cards. Don’t be afraid to compare cards so that you can find a credit card with rewards you’ll earn and use and with an interest rate that won’t empty your pockets. Thus, you don’t earn much more because you’re the one paying for your reward, if not more. Additionally, there are some reward credit cards that have high annual fees (a fee you pay to have the card). Be sure to read the small print and look for this, as it’s something a lot of cardholders miss.
There are many different kinds of rewards you can earn. Cash back is one of the most popular kinds of rewards offered by credit card companies. Many times, you earn between 1-2% back for each dollar you spend (i.e. $10-20 per $1,000). Make sure to read the fine print whenever you look into these kinds of reward-based credit cards: You want to be aware of whether or not there’s a cap on the amount of money you can get back.
There are some companies that offer this cash back in the form of gift cards (i.e. so you spend the money at specific stores that the credit card companies own or have struck a deal with). If you know you want to spend your money at one of these stores and the interest rate is relatively low, consider this option, especially if you’re saving for some luxury item.
Some reward-based credit cards give the holder points for every purchase made with their card, and the cardholder can redeem these points for gift cards, cash, or any number of items. If you’re considering this option, be sure you know what you can redeem the points for, if there’s a cap of how many points you can earn, and if there’s a deadline for saving and spending your points.
Another kind of reward credit card offers cardholders airline rewards, sometimes known as frequent flyer programs. For every point you make with a purchase – every dollar you spend – you earn a mile. Be sure you know how many points it takes to redeem your miles. You don’t want to invest in a credit card like this if you’re hoping to earn enough points to pay for your spring break trip. Also, some credit cards will only allow you to redeem your airline miles with certain airlines.