The most popular types of reward credit cards are Cash Back, Travel Rewards, and Gas Rewards. Credit card companies offer various types of reward programs and you can even find credit cards that offer a combination of rewards.
Some people may get confused when choosing reward credit cards especially because there are so many choices in the market. So which of the best rewards credit card suits you? Consider the following points to ponder:
Don’t focus on hype. Advertisements only highlight the best features of a reward credit card. But the weak points are always concealed. You may get easily enticed by the promise to earn big rewards. However, you should never sign up for a reward credit card without conducting a thorough investigation. The only way you can be certain about your credit card choice is by reading the fine print and doing comparison.
Rates and Fees. Credit cards that offer reward programs are expected to carry higher interest rates than non-reward cards. However, this does not mean you should settle for a high rate card. By comparing reward cards, you should be able to find one with a reasonable interest rate.
You may come across credit cards that offer a low introductory rate or 0% APR for a limited period. While it’s great to enjoy a low rate or zero interest rate during the first few months of your credit card use, you want to make sure that regular rate will still be reasonable.
Aside from the APR, don’t forget to check all the fees associated with your card. For instance, how much do you need to pay each year to keep your account active? Annual fees can be really expensive. If you have to pay $80 each year, do you think the reward card is still worth keeping? Or will you be better off with a non-reward credit card with low interest rate and minimal set of fees?
Reward Program. How do you plan to use your credit card with rewards? Will you be using it for your monthly groceries and utility bills? Will you be using it mainly for emergencies? If you’re a frequent traveller, will you be using your reward card for travel-related expenses? To get the most out of a reward program, you should choose the one that matches your personal spending habits.
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See if you can find a reward credit card that is sponsored by your favourite merchants or establishments. You will be able to earn bigger points from these purchases. For example, if you plan to apply for cash back reward credit cards, check out which shops are affiliated with that card so you can make the most out of the program.
Perks and privileges. After considering the interest rate, the fees, and the type of the reward offered, you should also check out the perks that you can enjoy as a member of the reward program. For instance, does your reward credit card offer free travel insurance, exclusive savings, and other relevant services? Don’t forget that these non-monetary privileges can enable you to save money as well.