With the credit card industry being so competitive, credit card companies had to find creative ways to attract customers. One of these ways is offering rewards credit cards.
As the name suggests, a rewards credit card earns the cardholder valuable rewards on purchases. You use your card at retailers taking part in the credit card company’s reward program to earn benefits. These can be travel points you can redeem towards airfare or hotels. Alternatively, you can earn cashback or store credit.
Every credit card provider has a unique rewards program. Some offer points, while others provide cashback. The number and value of points you earn with one credit card provider will differ from another. Also, some credit card companies only allow you to redeem your rewards towards one category.
These are some common rewards you can earn:
Although rewards cards offer valuable benefits, they can have significant drawbacks. Consider the following pros and cons when shopping around for a credit card.
Given there are different rewards cards in the market that can earn you various benefits, choosing one card may be difficult. The choice can be more straightforward when you consider these points.
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Frequent credit card users who have good to excellent credit. Since rewards credit cards have high-interest rates and annual fees, they’re suited for anyone whose income can support the charges. Also, if you can reap all the benefits to offset the annual fee, this may be an excellent credit card for you.
Given consumers’ needs vary, there are no single-best rewards credit cards. Instead, the question is, ‘What’s the best rewards credit card for me?’ You can assess your spending habits, lifestyle, and income to find the right rewards credit card.
The high-value benefits rewards credit cards often require an annual fee. Also, you’re paying for the conveniences granted by the card and its various perks. The annual fee on some rewards cards may seem high, but it’s often justifiable if you weigh them against the benefits.
That’s why it’s essential to determine if you’ll get much use from a rewards credit card before applying for one. If you use it often, you can earn back the annual fee in the form of rewards. However, if you don’t plan to use your credit card or redeem the points, it’s best to opt for another card.
It depends on your credit card provider. They can award points monthly or once a year. Once they appear in your account, you can redeem them.