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 inaugural J.D. Power Credit Card Satisfaction Study found that when it comes to choosing a credit card, it’s all about rewards. But just offering rewards isn’t enough: cardholders have to understand how to redeem them, as well.
Travelers will be able to collect more points and take advantage of more special features with the new and improved Southwest Rapid Rewards Priority card, which is offering a limited-time introductory bonus of up to 65,000 reward points. This is more than half the points needed to get a companion pass, once they’ve spent the required amount on the card.
If you’re a frequent Whole Foods shopper and an Amazon Prime member, there’s now another reason to apply for an Amazon Rewards Visa Card, if you don’t yet have one. Following the acquisition of Whole Foods by the retail giant, Amazon is offering Prime members who have an Amazon Rewards Visa Card 5% off all Whole Food Market purchases.
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 even had them, or didn’t know how to redeem them.
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 and unattractive, yet they work pretty well when a need to rebuild credit arises.