The Reverse Side of Rewards Credit Cards

If you’re interested in rewards credit cards, you’re definitely not the only one. There are plenty of people that are definitely intrigued by the idea of getting a reward every time they go to use their credit cards. However, is that something that means that you’re always going to use these cards? Not so fast. It’s important to make sure that you look at the reverse side of rewards credit cards before you get too excited. Just as there are benefits of these credits, there are also some drawbacks. You will need to really think about the type of spending that you are known for. Do you really spend enough money on credit in order to take advantage of those rewards? What type of restrictions do you have with your rewards credit card?

Of course, we’re getting a little bit ahead of ourselves. You see, in order to get a rewards card, you actually have to apply for one AND receive that exact card type. You see, many credit card companies assume that you just really want a credit card no matter what. So this means that if you apply and your credit isn’t sufficient enough for a rewards card, they will just stick you with a general card instead. If you don’t qualify for anything, then they will send you a rejection notice in the mail. You can then look at your credit history and see what they were so focused on, but that’s up to you.

Rewards credit cards may also carry a much higher interest rate than the non-reward component. Be sure that it’s really going to work out in your favor if you decide to get these credit cards. There’s no need to feel like it’s impossible to get the credit card that’s right for you.

Don’t forget that you will need to be a member in good standing in order to unlock those rewards. If you start defaulting on your account, you aren’t going to be eligible for any of those rewards that you signed up for. You can usually choose between miles or points. This is a debate that is still raging online, but the truth is that it’s about what you personally prefer. We tend to get rewards cards that focus on miles over points, because airfare is so expensive these days. Yet it’s completely up to you to figure out how you’re going to connect everything together.

Rewards credit cards don’t have to be evil, but you do need to have a fair idea of how you’re going to make them work in your life. As long as you’re paying off your bill and you can handle the credit card in your regular budget with no issues, then there’s really nothing wrong with putting in your application today!

A Closer Look at Rewards Credit Cards

Most credit cards will come with some sort of benefit or reward scheme to entice you to use it. “The better the reward, the higher the cost” is generally a good way of explaining the “string.” For a rewards scheme to really be all that it can be, a more than reasonable amount of money must be available to spend. As a result, the better rewards schemes come on credit cards with higher interest rates or fees, sometimes both. You may even see the grace period on your contract being shortened to a period of mere days to encourage active use and repayment.

If money is no object then a credit card with a better rewards scheme could be more beneficial to you than saving money on excess interest. A lot of online shopping sites will offer incentives to shop with them as well and combined with the card incentives, there is the potential for a lot of shopping! And a lot of rewards!

In fact, the higher your disposable income, the more suited to you are credit cards with the rewards schemes. Because the interest rates charged are generally higher to get the better rewards, the more time and money you can dedicate to using your credit card for everyday transactions, the greater your rewards are going to be. Remember to use your rewards credit card for purchases you can repay before the interest-free repayment period expires, this way you are essentially being “paid to shop.”

There are all sorts of rewards you can earn through using your credit card. Many schemes offer points towards air travel and accommodation. Many more give away whiteware and appliances when enough points have accrued. How about the ones that give you vouchers to spend at your local grocery store? Or a trailer load of goodies for Christmas if you spend over a certain amount before time? Beauty spa trips, casino adventures, thrill seeking activities, dinners and beds are just a few of the hundreds of different rewards available to reward-based credit card users.

Some, however, will delete your points every 6 months, so this can make it hard to earn any substantial amount if you are just a casual credit card user. Others will store points for up to two years, while still yet others never remove any points from you for your entire life!  Look at all the terms and conditions of your credit card rewards scheme closely to see if it really is the best for your shopping needs.