Getting to know the basics of credit card rewards

Thursday, October 7th, 2010

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

Wednesday, November 8th, 2017
Sometimes it's hard to remember to redeem your credit card rewards: an astounding percentage of cash back rewards are never used, probably because cardholders didn't realize they ...
Wednesday, August 30th, 2017
Consumers with no credit or poor credit tend to neglect to consider secured credit cards as an opportunity to establish or re-establish their credit. The cards may look expensive ...
Thursday, June 22nd, 2017
The new Blue Business Plus Credit Card from American Express is designed to give small business owners rewards and tools to help them build their businesses, including double ...
Wednesday, January 18th, 2017
If you know the hit song “Happy,” you may be surprised to hear that the singer of that song, Pharrell Williams, is now working for American Express.
Tuesday, August 30th, 2016
Holders of the Ritz-Carlton Rewards Credit card are in for a nice surprise. The card issuer has announced some significant upgrades to the card, going along with its new status as ...
Best Credit Offer
Discover it® - Cashback Match™
Check off the cards you want to compare. Then click the Compare link to go to the comparison table.
Consumer Rating: 5 / 5
Horizon Card Services Horizon Gold Credit Card
Copyright © 2001-2018 All Rights Reserved.

* The webpage is a free service and an information resource for credit cards and financial products and services available to eligible United States consumers. does not offer any warranties and is not a direct service. There are no guarantees for approval or offers when applying for a credit card. Please refer to the application if you would like more information on each credit card. When you click "Apply" for a particular credit card, please take the time to review the terms and conditions of the product/service at the issuer's website. All logos on the website are property of their respective owners.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer. Opinions expressed here are the author's alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. Reasonable efforts are made to present accurate info, however all info is presented without warranty. Consult a card's issuing bank for terms & conditions. makes every effort to keep information up to date and accurate. However, the information regularly changes and is presented without warranty. Therefore, we strongly recommend all our readers to visit the credit card application page by clicking "Apply Online!" button to review the detailed credit card's terms and conditions. Note that may be compensated by the credit card issuers when the readers apply for a credit card through this site. is an independent, advertising-supported website which receives compensation from the credit card issuers and companies whose offers appear on the site. Compensation may impact how and where products appear on our site, including, for example, the order in which they may appear on the site pages. does not review or list all available financial or credit offers.

Disclosure: Not an access card.

User Generated Content Disclaimer: These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.