Articles | What are Rewards Credit Cards?

Rewards credit cards are the perfect choice for people who pay off their full balance when their bills come in, since they can enjoy benefits simply for using their card. There are a wide variety of rewards available allowing you to avail of everything from free miles to rebates. Here is a brief guide to some of them:

Frequent Flier Miles that you can cash in for free flights.

Gasoline rewards that offer cash back rewards of 3|to 5|on gas from the sponsor s stations.

Cash rebates that are based on the amount charged on the card, with larger rebates given on higher tiers of purchases.

Retailer rewards that offer cash back rewards that can be redeemed at the retailer.

Gift points that you earn when you charge the minimum amount on your card and which you can redeem for gifts from the issuer s catalogue.

It should be noted that you need to have good credit in order to be approved for rewards credit cards and these cards generally come with higher interest rates, although many of them may not impose annual fees. You also need to be disciplined with your spending, since there is always the temptation to charge more on the card in order to get the rewards.

What are the other things you need to keep in mind when availing of rewards credit cards?

You should avail of a card whose rewards suit your lifestyle. For example, if you drive your car a lot, you should avail of a gas rewards card. Make sure to compare credit card offers carefully to find the ones that best match your interests.

Avoid cards that have fees, since these may easily consume any rewards you may earn from using the card.

As much as possible pay off your bill in full. Keep in mind that one of the ways credit card issuers offset the rewards they give is to charge higher interest rates so avoid retaining a balance on your account.

Be aware of how much you ll have to spend before the rewards start to kick in. You might have to spend thousands of dollars before you get a reward worth $100. Is that really worth it?

Read the terms and conditions attached to the rewards carefully. The brochures for the card, for example, might promise you 2|cash back, but when you read the lending contract you realize that you ll only get this reward when you reach the highest level of spending.

You should only avail of frequent flyer rewards cards if you usually charge a lot on your card. Otherwise, it might take you a long time before you earn enough points to qualify for a trip.

Don t have too many cards. If you have multiple cards and you re spending on all of them in order to avail of the rewards, then you may be losing out. Examine all the rewards carefully and drop the superfluous rewards credit cards.