Do you own a credit card with rewards? If yes, does your credit card truly reward you? Or do you find yourself spending more on fees than benefitting? Unfortunately, what seems like a great reward credit card at first glance may turn out to be unrewarding later on.
In this article, let’s talk about the factors that can make a reward credit card unrewarding:
1. Rewards that you can’t enjoy.
What’s the use of earning reward points when you can’t use them? Perhaps you own a Frequent Flier Miles credit card but you can’t really enjoy your free flight because no seats are available or all seats have been taken.
2. Expensive maintenance fees.
How much do you need to spend to keep your reward credit card active? Some credit cards with rewards carry very expensive annual fees and finance charges which make maintenance a burden. If you have to pay $100 a year, do you really get more value from the rewards you earn?
3. Reward Limits.
Some reward credit cards impose a limit on the maximum value of rewards you can earn in a month or in a year. For instance, when you’ve reached $1,000 worth of purchase, you may stop earning points no matter how much more you charge to your reward credit card. Even if you continue spending with your credit card, you get nothing in return.
On the other hand, there are reward credit cards that will not give you points until after you’ve reached the minimum required worth of purchase. For example, you may need to spend at least $500 or higher before points start to come in.
4. Rewards that expire before you can redeem them.
Does your reward credit card impose an expiration date? If yes, you could lose all your hard-earned points even before you get the chance to redeem them. Look for a reward credit card that gives a reasonable length of time for you to be able redeem your points or that allows you to carry over unused points until you’ve collected enough to qualify for redemption.
Related Post: Redeem Your Rewards Before They Expire
5. Limited redemption options.
Some reward programs do not offer flexible options in redeeming rewards. For example, if you own a travel reward credit card, you might not be able to exchange your miles points for cash or other rewards except for a free flight. If you don’t want to go on a trip or if it’s not possible for you to travel before the blackout date, all points you’ve collected may become forfeited. This is why it’s always a good idea to choose a reward credit card with flexible redemption options such as being able to exchange your points for cash back, gift check, merchandise, credit, etc.