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
Capital One keeps adding new rewards redemption options to its travel credit cards. To be more precise, holders of Venture and Spark credit cards can now transfer accumulated miles to even more loyalty programs. Surprisingly, new transfer partners are not airlines, as it could be expected, but large hotel chains AccorHotels and Wyndham Hotels & […]
When the new year is on the way, everyone wants to not only resume the previous one but also draw up new plans and resolutions. This applies to your credit card rewards as well. If you are a happy owner of a cashback credit card with rotating quarterly categories, you probably were looking forward to December to find out what the issuer would prepare for you this time and where you could get more benefits.
This month, Capital One added an important extra redemption option for some of its credit cards. Such an introduction will surely appeal to lovers of shopping at online stores, and, more precisely, at Amazon.com. Yes, now owners of most Capital One credit cards get the opportunity to spend the rewards they earn on millions of Amazon items (except the restricted ones) due to a new partnership!
It has just been announced that Capital One and Walmart are preparing to release their new product – the Capital One Walmart Rewards Credit Card Program. The program will be available on two new co-branded credit cards that are specially designed for customers shopping at Walmart.