Rewards credit cards have become extremely popular among both businesses and consumers today. There are thousands of different rewards programs available to choose from, and it is vitally important to select a rewards card that matches your shopping habits to best maximize your rewards. Rewards credit cards are often geared towards the big spenders; however carrying even a small balance will usually negate the value of any rewards in fees. Also, consider the personal value of the reward offered to you. This is to say, if you rarely travel, you might not want to get a card that rewards use with airline miles.
Also, due to competition this is becoming less common, but there are still rewards cards out there that simply don’t pay. Annual fees and other hidden costs amount for more than the rewards, actually leaving you in the negative. Be wary of this and research all the terms of a rewards credit card before signing up for it. Most useful rewards programs today will have no annual fees. Many will simply offer cash back, and these are the programs which usually have the highest payoff. Also, consider that cash rewards can be used to essentially purchase any other sort of reward desired. Even if your reward is a charity donation, you can usually earn more in a cash reward program and simply donate that to your charity.
Other aspects to consider with cash-back programs, way down in the fine print, are the tiers of spending required in order to get the big percent advertised. Sometimes you can only be getting a fraction of a percent cash back until you’ve spent a few thousand dollars. This is where proper budgeting comes into play: as stated above, carrying a small balance for even a month can cost you more than the rewards. But if you spend a few thousand dollars with it and pay off your balance on time every month, it is very easy to rake in on a good rewards program.
If controlling your spending isn’t really your “style,” you may want to consider a rewards debit card instead. This way, you can’t spend more than you have, and you can still reap some nice rewards or cash back. However, debit card reward programs are often only half as good as their credit card counterparts. Still, it’s often a nice bonus if you regularly use a debit card, and especially if you’ve been paying a fee for one.
So look around, do some research, and find a program that meets your needs. Just make sure to read all the details and make all your payments on time, and a rewards credit card can be a very worthwhile thing. Many people who have success with one rewards program will try others, and using multiple simulations programs for purchases at the same time. Again, only for those who are meticulous with their math: miss a payment, and most rewards programs will load on the fees. But be prompt with your payments, and a rewards credit card can be a valuable asset to your wallet.