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Rewards Credit Card Fine Print
Tempted by the idea that you can make money, get free gas, fly free airmiles and stay at hotels for free just because of your rewards credit card. We advise reading the small print first. Most rewards credit cards have a higher interest rate than standard credit cards. Therefore, you shouldn't think about even applying for a rewards credit card if you have an outstanding balance on your existing credit card. Even with the best rewards credit cards it can be nearly impossible to earn more rewards than the interest you pay back. Look for rewards cards that clearly state they will pay you a full percentage back, otherwise you may find that your rewards are much lower than expected. Look out for a phrase like “earn a full 1% rebate”. If you do not use your credit card often, then look for a rewards card that offers quick rewards. If you are a low spender then there really isn't very much point in waiting for years in order to get your free flight. Instead, you would benefit much more from your rewards card if you were to earn rewards with fewer points totals such as 1,000 points getting you a gift card. Gas rewards cards are especially popular now that the price of gas has gone so high. But you have to look out for the rules associated with the card. Many of the gas rewards cards will only offer full rebates when you purchase your gas at a traditional gas station rather than a supermarket or wholesale club. In general it's best to try and avoid rewards cards with annual fees. However, certain rewards cards will offer you an incentive to pay the annual fee, such as double points on certain purchases. In instances such as these then you might actually benefit from paying the annual fee. When applying for a rewards credit card be sure to check for any earnings caps or points expirations. You would not like to get caught out with a points expiration, especially if you have been building up your points to go towards an expensive flight or stay at a hotel. |
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