Finding the right reward credit card from a long list of credit cards can be a difficult challenge. Credit cards can be classified according to the type of its reward program or to the specific purpose it was created for.
For example, some reward credit cards are especially made for students, for frequent travelers, for car owners, for frequent shoppers, and even for business owners. If you’re thinking about getting one, how would you know which reward credit card to pick?
Here are two questions that you can ask yourself before making a decision
Where do I use my credit card the most?
If you need a credit card to use on occasional or minimal purchases, your most practical choice is a cash back reward credit card that has no blackout dates. Thus, you can concentrate on collecting points without worrying about the expiration period.
A travel reward credit card sure sounds more exciting, but such a credit card is only ideal for people who travel overseas regularly– whether for leisure or business purposes. By using your travel credit card on airline ticket purchases, hotel reservations and other travel-related expenses, collecting points and redeeming rewards will be easy..
Interestingly, a gas reward credit card can be a great option for car owners who spend a big amount of budget on gasoline purchases. Of course, if you don’t have your own car, then this type of reward credit card may not be of much benefit to you at all.
Think about your personal needs and lifestyle before looking at different reward credit cards. Knowing your priorities will help you come up with a practical and realistic decision.
How much will it cost me to own the credit card?
Credit cards with rewards may have slightly higher APR and fees compared to non-reward credit cards. When evaluating your options, be sure to take a look at the interest rate and fees. Examples of such fees are annual fee, late penalty fee, over-the-limit fee, currency conversion fees, etc.
Some credit card issuers offer a promotional interest rate to entice new customers. However, before grabbing the opportunity, be sure that you clearly understand the fine print. How much would be the regular APR when the introductory period ends?
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The annual fee for reward credit cards can range from $80 to as high as $100 or higher. If you have to pay $80 annually to continue using your reward credit card, is it really worth it? Will the rewards you get from your spending be worth much more? Or will those extra fees defeat your purpose for getting a reward credit card, which is to save you money and enjoy special privileges?