Getting to know the basics of credit card rewards
Although credit cards rewards programs have huge benefits, there are certain hidden costs that negate all the savings and rewards that are offered. Each credit card has its own unique reward programs and each reward will benefit different customers in different ways. For instance, a person who travels extensively will benefit from the travel rewards and the travel rewards credit cards would be far more valuable than for someone who travels just occasionally. Hence it would be wise to do an evaluation as to which card offers would be ideally suited for an individual.
The first point of consideration is the interest rate. Cards that have rewards programs carry a higher rate of interest than those that don`t and sometimes the interest rates could be double. Even in cases of regular payments and leaving no balances on the card, the interest rate could still be high in case of unavoidable circumstances where a part of the balance is due.
The second point to take note of is the account fees. Rewards credit cards normally charge account fees also. These account fees will usually occur as higher transaction fees, annual fees that are more than average, fees on foreign transaction, or an increase in fees with regard to balance transfers. It would be worthwhile to consider the excess charges and then take a relook and try and figure out if the excess charges outweigh the benefits in terms of rewards.
Next is the value of the rewards, as the reward in itself varies from one card to another. While some cards may offer rewards on a spending of about $5000, there could be another card offering the same reward on a spending of about $50,000. While this could be overlooked in case the fees and the interest charged is less, but this cannot be overlooked if all the other charges are also on the higher side.
In case of redeeming the rewards there is a fee charged for the reward redemption also. While a percentage of the reward value may be charged as the redemption fee in some cases, in others the various cost factors such as shipping charges etc could be on the higher side. This could in turn negate the value of the rewards itself. So, one has to consider these things carefully before redeeming the rewards. In case the issuer fails to reveal all these hidden costs or charges, then in all probability the terms and conditions could be disadvantageous to the card holder.
Latest Credit Card Rewards News
The SoFi Credit Card was introduced in October 2020, and now it is open to anyone interested in applying. SoFi has used the time since the limited release to improve and refine their credit card based on feedback they received from first members. The SoFi Credit Card became available to the general public on March […]
American Express has rolled out a heap of new perks for the following group of its co-branded travel credit cards: Delta SkyMiles, Hilton Honors, and Marriott Bonvoy cards. The deals are available to owners of the participating Amex cards issued before Jan. 1, 2021. Depending on the card, eligible holders can receive from $5 to […]
This week, BlockFi, a crypto lending company, announced the upcoming release of its rather unusual credit card – the Bitcoin Rewards Credit Card. The card will become the first-ever credit card with cryptocurrency rewards. Until now, credit cards’ rewards programs could offer cashback, points, or miles. But earning credit card rewards in the form of […]
2020 can be safely called the weirdest year of the last decade. The pandemic has affected every corner of the world. And we can only guess what surprises await us in the last month of the year. However, something still remains the same (or almost the same) – Black Friday. It is not hard to […]
This week marked the launch of another credit card. This time we are talking about the new cash back credit card from Venmo, a mobile payment service owned by PayPal. The card got a very simple name – Venmo Credit Card. The company announced its plans to roll out its first credit card a year […]