Comparing credit cards with rewards can sometimes be confusing if you do not know exactly what you’re looking for. On this post, we present five easy steps to help consumers compare and choose the right reward credit card.
1. Choose the type of reward that suits your personal style. Individuals have different needs and spending styles so it’s important to know what your personal style is and look for a credit card that complements you.
Do you need a credit card with airline rewards? If you’re a frequent traveler, perhaps you do. Do you drive your own car? If yes, maybe you may consider a credit card with gas rebates so you can enjoy savings from your gasoline purchases. On the other hand, maybe you would like a cash back credit cards that gives you the chance to get rewarded from your every day purchases.
Once you have decided on the type of reward credit card you need, you should be prepared to do further evaluation and comparison of credit cards that fall in that particular category.
2. Understand the real value of the rewards offered. Different reward credit cards may use varying point systems. Some reward cards may offer to give back 1 point per dollar spent while other reward cards may give back up to 5% rewards from the amount spent.
When comparing reward values, you should understand how the system works. For instance, the 5 percent rebate may only be applicable to qualified purchases. What makes the purchase qualified for the 5% rebate? Qualifying purchases are generally those made from affiliated merchants and establishments. However, if you do not purchase from these shops, you might not even get rewarded at all.
3. Watch out for caps. Sometimes, you may stop earning rewards altogether once you have reached the maximum value of rewards allowable for a member. There could be a limit on the value of rewards you can earn in a month or in a year.
For example, once you have reached $1,000 worth of rewards in a year, you may stop collecting points even as you continue to spend with your reward credit card. Sometimes, a credit card that initially offers generous points or rebates may try to get back by imposing a very low cap on the value of rewards you can earn.
4. Watch out for introductory offers. You may also encounter rewards credit cards that offer very attractive bonuses or reward points. The question is, how long would the generosity last? These offers may expire after three or six months. Afterwards, you may find yourself stuck with a credit card that gives back very minimal rewards.
5. Read the complete Terms and Conditions. To avoid unpleasant surprises later on, you should take the time to read and understand the stipulations in the contract. Surprisingly, many cardholders signed up for a credit card, merely scanning the small print. To be certain that you’ve made the right choice, do yourself a favor by evaluating the fine print.