Reward programs are being utilized by credit card companies to attract many clients. Who wouldn't want to receive a certain amount of cash back by making frequent purchases? Free money is valued by almost individual, especially during hard times. But it can be quite costly in the long run, why?
Companies promise their customers some kind of reward or points every time they make purchases or simply spend money on a particular thing. That is why you tend to purchase or spend more than you should just to earn points in order to get a reward. And once the bill arrives, you will be shocked by the huge amount of payments that you need to settle.
However, rewards are not that bad. In fact, you do get some benefits with it.
When you secure an application form for a credit card, make sure that you're not just there because of the rewards that you are looking forward to earn. You have to know all the terms, the conditions, the rates, the rewards, and other important matters.
Reward programs are not the same all throughout. Most of these programs change over time, to suit the different needs of the people in different times or situations. Take time to read everything about your credit card application, including those in fine print. Familiarize yourself with the type of agreement there is. There are also companies which expressly state that they frequently change their reward programs if badly needed.
Rewards provided by your credit cards are usually based on how much money was spent over a specified period. Every time you make a purchase, your points are accumulated. The value and points vary, based on the card that you're using. You can redeem your rewards in the form of airline miles, gas rebates, store gift cards, cash back, discounts on merchandise, and many more.
Consider the following tips in choosing the right reward credit card:
- Your habits and needs should be considered, and not just the rewards that you're expecting to get out of the card. If you always carry a monthly balance, choose a card with low APR or interest rate.
- The reward should suit you best. As mentioned earlier, cards carry different rewards. So you need to gather as much information about the different rewards offered by different credit cards.
- The 'fine print' is just as important as the other prints in the document, so you need to read that carefully. Reward points accumulate over time, and it has an expiration. You should also know the different fees being charged by the card issuer which include APR, late fees, and limit fees.
- Before choosing a card, compare several credit cards first. Since you already know what type of reward you like, check if the cards offer such reward.
- Check a number of sources of valuable information. The internet is probably the best site to obtain credit card comparisons; another is the Federal Reserve.
If you want to enhance your daily life, then its time to get a credit card; but just make sure that you use it in a responsible manner. You can buy anything even when you're on a tight budget, and when the bill arrives, pay your dues to avoid a bad debt.