Reward credit cards come in a variety of forms. Specifically, how points toward rewards are earned and the types of rewards that can be earned with a reward credit card varies from card to card.
The rewards offered by reward credit cards are generally related to a special area. For example, some reward credit cards allow cardholders to earn points when making purchases at gas stations, supermarkets, or drugstores. The rewards earned are often related to this in some way, such as the cardholder may receive gift certificates to the same types of stores. Similarly, the reward credit card may be related to airline travel. Every time the cardholder makes purchases with a specific airline, he or she earns airline miles or free travel. In addition, these airline reward credit cards also generally offer the cardholder free companion tickets.
When it comes to choosing the best reward credit cards, the consumer needs to assess his or her lifestyle and determine which rewards are most attractive – and most profitable – for his or her needs. A reward credit card that provides specialized rewards, such as gift certificates to a specific restaurant, may not be useful to a cardholder that does not have a need for that reward.
Reward credit cards can provide credit cardholders with fantastic rewards for their purchases. At the same time, the consumer needs to be sure he or she isn’t actually paying for the reward in the form of finance charges and annual fees. Many reward credit cards assess an annual fee. If this annual fee costs more than it would cost to simply purchase the reward, it is certainly not worth paying for.
The same holds true when looking at the APR. A cardholder who pays the balance of his or her credit card in full each month need not worry about the APR. One that intends to carry a balance from billing cycle to billing cycle, however, must consider the amount of money that will be spent in the form of finance charges. Once again, if the finance charges will be too great, the rewards of the credit card are not really rewards – they are items the cardholder is paying for.
Several reward credit cards have expiration dates. For those cardholders that will not be able to collect enough reward points before they expire, these reward credit cards may not be the best option. Similarly, some reward credit cards have limitations to how many points can be acquired each year. Cardholders need to consider these limitations in order to ensure they are receiving the greatest amount of rewards possible. If a cardholder spends $15,000 per year on a credit card, but a rewards credit card only rewards up to the first $10,000, that is $5,000 that is going unrewarded. The answer may be to select a different reward credit card or to simply stop spending on this particular credit card once the limit has been reached. After all, every dollar spent on a credit card deserves to be rewarded.
A good place for consumers to look for the best reward credit cards is at the businesses they frequent. For example, a consumer that routinely purchases gas from a specific type of gas station should inquire with that business to learn if it has a rewards credit card. The same is true for a consumer that frequents certain restaurants, stores, and airlines. It is becoming increasingly commonplace for businesses to pair up with major credit cards to offer special reward cards.