Choosing Credit Card Rewards
As major credit card issuers compete for customers, credit card rewards are ever plentiful. Today’s card holders can enjoy free sky miles, hotel and travel points, cash back for purchases, even money contributed to an IRA or transferred to a interest accruing savings account.
But which credit card reward is better? Points or cash back? Main contributors are the interest rate offered to card applicants based upon their credit scores, as well as the fine print regarding how to earn; and redeem, points and cash back.
When choosing a credit card rewards offer, decide what you desire most and which you can generate the most rewards. Since computing points is often confusing, many consumers choose a cash back credit card instead of a points card. With a cash back card, they know exactly how much money they will earn, and redemption is far easier. Even consumers who travel frequently will often prefer a cash back credit card instead of a points card for that very reason, plus because they have more flexibility on how; and where, to use the cash back. They don’t have to worry about point blackout dates, nor restrictions to a specific airline or hotel.
Another problem consumers face when choosing a rewards card, are card fees and whether or not they will payoff balances in full each month. Otherwise, fees and interest could be more costly than the cash back and points accrued.
For consumers who do not frequently travel, and those who do not patronize a particular airline or hotel, Credit Federal suggests a cash back credit card versus a points card. Some airline miles cards are limited to a particular airline, and may have restricted travel dates. With cash back rewards, not only do you know exactly what amount your earnings will be per purchase, getting and spending your cash rewards is much easier and more flexible. You can view various credit card rewards offered by major issuers; including American Express, Chase, Citi, Discover, Visa and MasterCard at Credit Federal.
Consumers desiring reward credit cards also face the scrutiny of a credit check. Typically the greater the rewards offered, the higher the credit qualification. Bad credit people are considered a high risk and generally do not qualify.
Before you submit an application for a rewards credit card, consider these tips:
To maximize your rewards, payoff balances in full each month. If you cannot payoff balances in full monthly, select a card with the lowest possible interest rate.
Check for rewards caps to see if there are restrictions on the amount of points, etc, you can earn.
Find a rewards card with no annual fee. Otherwise, the fee you pay may be greater than the rewards if you do not use the card frequently enough, or not effectively.
Avoid cards with reward expiration dates.
Avoid short-term, introductory only card rewards.
Browse for perks. Some rewards cards offer free perks such as travel insurance.
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Help answer the question about credit card rewards
What is the best rewards credit card for good but not excellent credit?What is the best rewards credit card. I only spend 400 a month and have good but not excellent credit.
May 17th, 2009 at 12:17 pm
May 17th, 2009 at 12:27 pm
if you travel alot go for the airline miles.. or if there's somewhere you go once a year every year (like my grandparents to hawai'i) go for the miles.. they don't pay for their ticket to hawai'i every year.. damn them.. if not, go for the cash back.. and the finance charges vary with the companies. good luck.
May 17th, 2009 at 1:55 pm
I have the CitiCard Rewards. It's pretty good, and there rewards are nice. I used to have the American Express, but I didn't love it.
CitiCard Rewards Site:
https://www.accountonline.com/ACQ/Chooser/ViewAll?ProspectID=1A3D03B4316C40B7A9E0AA6434914A2A&siteId=cb&SEARCH_CRITERIA_1=REWARDS
One warning… almost every credit card company will have your points expire after a certain amount of time. I think most are either 3 to 5 years. Just be aware…
May 17th, 2009 at 3:38 pm
A reward card is a credit card that offers all the conveniences of a credit card along with great frills like gas at a discount, cash back, discounts on select merchandise, flying miles and more. In fact, today many cards allow customers to opt for reward points or cash back and a customer can change easily from one option to the next.
Whenever you use a card you will earn points based on the value of your purchases. Accumulated points can then be adjusted against card fees, merchandise, or as cash back. Points can be redeemed for airline rewards, cash rebates, movie or concert tickets, or things like tours, electronic goods, or household goods.
An extremely popular marketing scheme people prefer to get cards that offer incentives over cards that offer no frills at all. However, cards that have reward schemes generally have a higher APR or annual percentage rate.
• Always weigh the pros and cons carefully before you select a rewards credit card. Find out whether it will in actuality be beneficial to you.
Apply online for a best reward card at: http://www.credit-card-gallery.com/Reward_Card.html
May 17th, 2009 at 8:46 pm
this site has a bunch of different reward options for you. You should read over the info and choose the best for you.
The page for REWARD CREDIT CARDS has a Capital 1 no hassle card for students too. You might like that one. Anyways this is where i go for cards. Hope it helps.
May 18th, 2009 at 5:55 am
When I use my Emigrant Direct credit card I get cash back deposited into my online savings account I have with them. The interest rate on the savings account is great, no fees or minimum balance. No annual fee for the card either.
May 18th, 2009 at 9:09 am
I personally suggest you look for no annual fee cards as well as cards with benefits. There are cards that cover rental car insurance, when travelling you can skip ahead of the ticket line etc. Low interest ones, usually comes with a fee.
May 19th, 2009 at 7:51 am
Well, let me be the first to tell you that a credit card can be a "safety net" in the event that you're in a crunch in between paychecks, and especially renting cars. Granted, you can use your debit card, but you better have the money on it, becuase credit and debit cards work completely different in that respect. But even if you just make small payments that you pay off in full every month, it's another way to build credit, which you can't build alone just by paying off loans. Credit and the scoring system is designed to where you should show that you can handle different types of credit both installment(car,furniture,appliance,personal signature, and mortgages) and revolving (credit cards and line of credit). An example of a balanced mixture of credit is 3 credit cards (2 major and one department store card) and either one paid or currently paying installment account.
Now while it is a good thing to have a credit card in the event of emergencies that may come about that could potentially wipe out your checking account if you use that, it's important to know the true meaning of needs vs. wants. Credit cards are not bad, it's the judgement of some people that use them. They easily confuse the 2 and that's where the problems arise. As long as you keep your priorities straight, and use credit like it's supposed to be used, then you should be ok.
A credit card you should look for, ideally is one without an annual fee and a low or 0 introductory interest rate. But my advice is to keep the balance no more than 30% of your total available credit to minimize the interest anyway.
Chase, Bank of America, and Citi all offer fairly good cards
I hope this answer helps out,
Good luck!
May 20th, 2009 at 2:23 am
I use a combination of 3 credit cards that comes close to maximizing the rewards I can earn from my normal spending. I funnel virtually all spending through those 3 cards and pay them off every month.
You can use this rewards calculator to find an optimal combination of N credit cards for your normal spending:
http://www.creditcardtuneup.com/
The tool will show you what you can earn with the best rewards card for you, the best 2 rewards cards for you, the best 3 rewards cards for you, etc. Then you can pick the rewards/hassle sweetspot that is best for you.
Note that a few of the better rewards cards are the Citi Driver's Edge card, AmEx Blue Cash, Fidelity Signature Rewards Visa, and the Capital One No Hassle Miles Ultra for Professionals Visa.