Don’t Let Reward Credit Cards Lead You to Bad Credit
Reward credit cards in the market today offer a variety of programs to choose from. The most popular are Travel Rewards Credit Cards, Gas rewards Credit Cards, and Cash back Rewards Credit Cards. All these promise loyal customers to get more from their spending. But some cardholders complain that they’re not getting what expected from their reward credit cards. Why So?
Stop Chasing Rewards If It Means Bad Credit
Using your reward credit card just to chase points could easily put you in a bad credit situation. Since credit cards with rewards usually have higher APR than credit cards without reward programs, your debts could quickly build up because of the additional interest fees you incur each month. This is why reward credit card holders must also be discreet about their spending.
The range of interest for most reward credit cards is from 15% to 19%. Imagine paying 19% interest plus the amount of your original balance each month. Some reward credit cards even carry annual fees that range from $50 to $100. If you have to pay $50 each year just to keep your card active, is the credit card still worth keeping?
Clearly, maintaining a monthly balance in your reward credit card can really put you in danger. In fact, if you can’t manage to pay off your monthly balances in full, it may be better for you to find a non-reward credit card with a low APR than to stay with a reward credit card and pay the higher APR each month.
Another big mistake about using reward credit cards is maximizing your credit limit. Perhaps you’ll want to collect more points at a sooner time and you try to do so by pushing your credit limit. However, such a habit can have a negative effect to your credit score. Payment can also prove to be more difficult if you’ve used up all your available credit.
Pay Close Attention to Deadlines
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If you own a reward credit card, you need to pay extra attention to your payment habits. Being late in submitting your payments would mean spending more on the additional interest rate and late fees. Aside from the extra costs, you could even get disqualified from redeeming your reward if you’re frequently late with your payments.
What about blackout dates and reward restrictions? Are you clear about the rules of your credit cards reward program? Some credit cards would forfeit the points you’ve collected if you fail to redeem them on the given period. The best way to understand the rules of the program is to examine the Terms and Conditions of your reward credit card. Even if you’ve already had that card with you for some time, why not review the Terms and Conditions so you can get more from what your credit card has to offer?
Ann Wilson is the head writer of Reward Credit Card Site . This resource provides consumers with valuable reviews and information on the best credit card reward programs . Its main objective is to help people to take advantage of credit card rewards and start earning reward points. Copyright © 2008