Reward Credit Cards – Do Your Research before you Apply for these Cards

Oct 10

Reward credit cards have become much popular of late. These credit cards are much in use with individuals that make online purchases more frequently. However, like all other credit cards, these cards can be used responsibly and may act as your ticket to achieving quality savings that yield huge passive income with time.

The reward points that you achieve with these cards tend to accumulate points on your regular spending, perks, flight, and hotel booking besides yielding huge cash backs. While making your online purchases, you may choose to earn a few extra points with some of the spending portals. It is always recommended that you should thoroughly research all credit cards before signing up for one. You could read articles online, watch a video or speak to your bank if you wanted to get some help and advice.

How good is your rewards credit card towards saving money?

Applying for a rewards credit card becomes effective when you meet a few or all of the criteria mentioned below:

  • Your credit score looks excellent or good.With a few good exceptions, the majority of reward cards demand a great credit score. You may opt for any secured credit card that yields huge cash-back rewards on the amount spent by you. Apart from a few reputable online banks like the Discover bank, the American Express is now targeting millennial with the Cobalt credit card.
  • Your card doesn’t show a balance usually.The APRs are usually much higher with the reward credit cards. If there’s some balance in your card, the entire value of your rewards is likely to get neutralized by the value of your accumulated interest.
  • You’re required to travel frequently.You can build reward points on the regular expenses shown on your travel credit card, especially if you’re some travel junkie.
  • You rely on a certain hotel or airline.When it comes to your choicest flights and lodgings, you may achieve a few quick travel reward points with the help of your co-branded cards.
  • You spend much on certain categories like restaurants, gas, and groceries. Few of the usual spending categories are known to acquire extra points on certain reward cards. You may even end up achieving cash-back worth up to 6%.

Set your goals if you meet most of the above conditions. Are you one of those individuals that look forward to more cash during the end of a month? Do you wish to save more for a long tour? Add more miles on a certain airline? You’ll find it easier to choose the right rewards card once you answer these questions honestly.

Few other factors to consider

Cardholder perks: Specific perks are offered by a few of the cards like visiting special events and airport lounges that help in turning your deal sweeter.

Overseas purchase fees: Your reward card may demand certain charges for each of your overseas purchases. Even when you get out of the U.S. you may experience restricted card acceptance as per the payment network of your card. Consider the points mentioned here while taking your decision.

Annual Charges: The charges might amount to a few hundred dollars every year. If you wish to offset them, then you must accumulate adequate points on your reward card.

You may end up earning a few benefits while shopping regularly with your rewards card if your credit rating is above average and you’re in a good financial situation. Don’t let the rewards be eaten up by your interest, rather let your balances be paid off. Improve your lifestyle by choosing the appropriate rewards card.