Having a regular credit card is great. However, a rewards credit card is often even better. With a points rewards credit card, your spending rewards you.
It’s a rewards credit card that accumulates points. Points rewards credit cards are a popular choice amongst Canadians. Once you earn enough points, you can redeem them for something you enjoy. For instance, if you gather enough points, you can purchase a flight ticket. Alternatively, you can redeem points for products from one of your favourite participating merchants.
A points rewards credit card functions like a regular credit card, except you'll gather points every time you use your card. Every dollar you spend in a particular category equates to a specific number of points.
For example, a points rewards credit card can offer 5 points per dollar spent on groceries, gas, and recurring bills. So if you spend $500 on groceries, you earn 2500 points.
The points you earn can be converted into rewards. This includes travel and gift cards. Bear in mind that the value of the various redemptions differs. You might get more value of up to $0.04 per point for travel and products. Whereas for gift cards, the value can be as low as $0.007 per point.
Points rewards credit cards have their benefits and drawbacks. So before settling on this card, it’s best to consider them.
Points rewards cards are valuable if you pick the right one from the get-go. Start by comparing the point's value to the annual fee. It's essential to determine if the points you earn will make up for the annual fee.
Also, look out for any additional perks that come with the card. Consider if they’re suitable for you.
As with every credit card, read the fine print. It's also vital to ensure you qualify for the card before applying.
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It depends. If you spend a lot of money on gas, groceries, and dining out, then it might be right for you. However, if you don’t anticipate paying your card’s balance every month, it may leave you with high-interest charges.
Also, anyone with a low credit score may find it harder to get a points rewards credit card. They’re typically targeted at consumers with good to excellent credit scores.
Yes. Besides earning different rewards, points rewards credit cards have a steeper learning curve than cash rewards credit cards.
The points system is often more complicated because you have to learn the cards rewards program. And which partners participate in the program. Therefore, cashback programs are much more convenient.
Also, what you earn with a cash rewards credit card is cash. You have to convert your points into cash with a points-based card, which may not offer as much value as redeeming them for travel.
Yes. It’s not wrong to get more than one rewards credit card to maximize your rewards. However, it’s essential to keep your spending in check. Don’t go overboard, or you’ll be dealing with several credit card bills.
Most credit card providers allow you to redeem your points for:
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