5 Questions to Ask About Your Rewards Credit Card

Friday, September 5th, 2014
Updated: September 5th, 2014
The content is accurate at the time of publication and is subject to change.

They say there’s no such thing as a free lunch, but rewards credit cards disprove that. With a rewards credit card, you can not only get a free lunch (using a gift card or cash back bonus), you can get free flights, free hotel stays, free merchandise, and more.

But as great as they are, all rewards credit cards aren’t created equal. To find out if you’re getting the most from your rewards credit card, here are five questions to ask:

  1. Is there a cap on my rewards? Most credit cards limit the amount of high-percentage cash back rewards, and some have a limit to how many points you can earn. Then again, travel rewards credit cards tend to give customers unlimited miles. Before you get too excited about lucrative offers like 5% cash back, check to see what the cap is. On 5% cash back cards, it’s usually $75 per quarter, or $300 per year.
  2. Will my points or miles expire? The most likely answer is, no. Most of the better rewards credit cards let you keep carrying over points, miles, and even cash back without an expiration date. But some cards do. Make sure to redeem your points or miles before they disappear. And be warned that if you don’t pay your credit card on time and your account falls into default, you will almost certainly lose your rewards. When you bring the account up to date, rewards won’t be reinstated. So keep up with those payments.
  3. Is it easy to redeem my rewards? Whether they are in the form of points, miles, or cash, credit card rewards are useless if you don’t redeem them. Check out the online account page for your credit card and see how easy it is to turn your points into cash, plane tickets, hotel reservations, or gift cards. If it isn’t easy, you aren’t likely to do it as often.
  4. Can miles be transferred between airlines? This one is important if you’re a frequent flyer who mainly uses your credit card to get travel bonuses. Being able to transfer frequent flyer rewards between airlines is a huge benefit, and makes reward redemption much more valuable. Check to make sure your miles will be eligible for redemption with your favorite airline. If not, look for a new travel rewards credit card that offers transferrable miles.
  5. Do you actually want the rewards offered? If your card gives great hotel and air travel benefits, but you’re a homebody or afraid to fly, a co-branded airline card isn’t going to do you much good. And if you hate shopping, then points for gift cards might not be the best rewards choice for you. There are so many types of rewards credit cards now, you should be able to find one that’s perfect for you.

With the right type of rewards credit card—or cards—you can get rewarded for spending money on the things you were going to buy anyway. It’s truly like getting something for nothing.

All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.

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