How to Make a Rewards Credit Card Reward You, Not the Company

How to Make a Rewards Credit Card Reward You, Not the Company
by: Margaret Winfrey



A rewards credit card can very often represent excellent value and
present real benefits to the consumer. However, it is important not to
sign up for a credit card based on the reward alone, and it will be
important to take two things into consideration.

The first aspect to consider is whether the card itself represents good
value in terms of the available limit, the interest rate charged and any
fees, in addition to costs that might be incurred for general maintenance
of the account. The second aspect to look at is the reward itself, and
whether this represents one which best suits your own personal interests,
needs and habits.

Very often, reward credit cards work by providing you with points on your
account whenever your credit card is used to purchase goods or services
from companies which are either subsidiary ones of the credit card
company itself, or part of an affiliate network of finance and retail
companies and organisations. One typical example many people come across
is a credit card which offers consumers reward points for purchasing fuel
from a particular garage or retailer. With a set number of points per
litre or per gallon, these points can be accumulated until a specified
number have been reached.

This then allows the consumer to choose from a number of different
rewards. In some cases, these can be items such as hampers, glassware,
holidays or other material goods. In other cases, it could be vouchers
for holidays and flights, and still others provide money off coupons or
cash back. In this case, you might spend a hundred dollars and receive a
1% cash back reward.

One of the issues that you need to look into when evaluating any reward
is how easy it is to accumulate points. Knowing that you can achieve a
free weekend break when you reach a certain level of points, you might
then ignore the interest rate in order to attain the points. Exactly the
same situation exists with store reward cards. People will pay more in
the more expensive store just to get points on their card, and a nice
lump sum pay-out later, rather than save the odd cent or two now. That is
one of the attractions of reward credit cards, and one that is enough for
many people to use them by choice.

But before signing up for a rewards credit card it will be important to
evaluate how likely it is that you will be able to realistically earn
enough points to acquire the reward itself, and whether any changes to
your shopping that may be required will impact on the amount you're
likely to spend. However, if you don't see any real need to change your
regular shopping habits, and you really will be able to earn points,
prizes or money off coupons, then certainly it makes good sense to
consider applying for a rewards credit card in place of a standard credit
card which does not offer any kind of reward.

As previously referred to with regard to store cards, one of the ways in
which rewards work well for companies is by encouraging loyalty, and by
encouraging you to use that particular credit card more often for your
purchases rather than any other credit card you may have. However - make
sure you don't fall into the trap of using your credit card to pay for
goods instead of using either cash or a debit card, if you are then
likely to forget to pay off the balance of the credit card at the end of
the month. Putting all your bills on the credit card and then forgetting
to pay the bill on time could result in you paying a good deal extra in
interest.

A rewards credit card is a great idea, and a real help if you already
shop in a way which could provide you with privileges without you having
to make any real changes. If you use a credit card regularly, such as in
business for example, whereby your company reimburses your expenses, then
a reward credit card is likely the best type for you to have - so long as
you pay the bills when your company pays you for what you have spent!

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About The Author
For more information on rewards credit cards and more, go to
MyCreditCard.com where you can compare rewards credit cards as well as search and apply for reward credit cards and other credit card offers and
applications from major banks and issuers.