What You Should Look for and Avoid from a Reward Credit Card

With so many different types of reward credit cards in the market, how can you make the right choice?  In this article, let’s discuss the important features you should look for from a reward credit card. Afterwards, we’ll take a look at some of the things that you should avoid.

Reward Credit Cards – What to Look For

Great reward system.  The ideal reward credit card should offer an attractive reward program.  As a card holder, you should be given the chance to get more out of your spending.  Of course, the right reward program depends on your personal spending style and needs.  So when comparing credit cards with rewards, don’t forget to consider if the credit card complements your lifestyle.

A low rate.  Reward credit cards usually carry higher interest rates than non-reward cards but this does not mean you should not compare at all.  The rates vary depending on the type of reward offered and the issuer.  By doing comparison, you will be able to find a credit card with a reasonable APR.  You might even come across reward cards that offer 0% APR or a low introductory rate.  You can take advantage of this offer but first, make sure that the regular interest rate will still be reasonable once the introductory period ends.

Minimal fees.  If you will need to spend a lot of fees to keep your card active, it will defeat your purpose of getting a reward credit card.  Choose a reward credit card that has a reasonable rate and a minimal set of fees as well.

Reward Credit Cards – What to Avoid

Low reward caps.  Some reward credit cards impose a limit on the number of points you can earn per month or annually.  For example, you may only be limited to earn 300 points per month, regardless of your spending.  This means, you stop earning points once you have reached the cap even if you continue to use your reward credit card for payment.

Unreasonable restrictions. Can you carry over unredeemed points or will these points be wasted?  It’s best to choose a reward credit card that allows you to carry over your points until you earn enough to claim a reward.  This way, you can be sure that none of your points will be wasted.

Complicated reward program.  Some reward credit cards have a very complex reward system making it difficult for the card holder to get points or redeem rewards.  For instance, you may only be able to earn points on “qualifying purchases” or selected transactions.  You might also get disqualified from earning points if you commit a violation.

At first glance, a reward program might seem attractive but upon closer look; you will be able to see whether or not the program will work for you.  Avoid credit cards that offer reward points that are subject to too many conditions. If this will be your first time to use a reward credit card, it’s best to choose one that has a simple, easy-to-follow reward system.

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