When A Reward Credit Card Becomes Unrewarding

Are you a reward credit cardholder? If yes, are you really getting the most out of your reward credit card? Or do you find yourself spending more on fees than getting rewarded? In reality, many owners of credit cards do not really get the benefits they thought their credit card with reward will bring them. Unfortunately, what seems like a great reward program at first glance turns out to be an unrewarding program later on.

What makes a reward credit card unrewarding? Consider the following points:

1. Rewards that you can’t enjoy.

Why get a credit card with Frequent Flier Miles rewards if you can’t enjoy the free travel anyways? Some travel rewards cardholders find it difficult to book flights because no seats are available for Frequent Flier Miles passengers especially during peak seasons. In the end, you may have to wait for the next available flight or watch as your points expire.

2. Expensive maintenance fees.

How much will it cost you to keep your account active? Some credit cards with rewards carry very high annual fees and finance charges so that the cardholder ends up with too many fees to pay. Think about it, if you have to pay $100 each year to continue using your reward credit card, are you truly rewarded or do you spend more on maintenance fees?

3. Reward Limits.

There are reward credit cards that impose restrictions. For instance, there might be a cap on the value of rewards you can earn in a month or in a year. Once you’ve reached the maximum worth of purchase, your points may stop accumulating regardless of how much more you spend with your reward credit card. Thus, even as you continue to shop with your credit card, you get nothing in return.

Some reward credit cards will not award you points until after you’ve made the required worth of purchase. For example, you may need to spend at least $500 or $1,000 before you start to earn points from your succeeding purchases.

4. Rewards that expire before you can redeem them.

Is there an expiration date? If there is, you could lose all your hard-earned points if you don’t redeem them on time. It’s best to avoid such credit cards and look for one that provides a reasonable length of time for you to be able redeem your points. You may also look for a credit card that will allow you to carry over unused points until you’ve collected enough to qualify for redemption.

5. Limited redemption options.

Does your credit card reward offer flexible options in redeeming rewards? For instance, if you don’t want to go on a trip or if it’s not possible for you to travel, will you have the option to exchange your miles points for cash back rather than have it forfeited?

Can you exchange your miles points for other types of rewards such as cash, gift check, merchandise, or as credit to your account? It’s best to find a reward credit card that offers flexible redemption options to be sure that you’ll enjoy the rewards you deserve.


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Related Rewards: chase credit cards

Cash Back vs. Rewards Credit Cards

Consumers today are given more options when it comes to credit cards. There are cash back credit cards that give away rebates or points equivalent to cash while some credit cards provide bonuses by means of rewards such as free travel, free gas, charity donations, etc. With all these choices, which credit card should you get? To answer this question objectively, let’s consider the advantage of both cash back credit cards as well as rewards credit cards.

Cash-back Credit Cards

An advantage of cash back credit cards over rewards credit cards is its flexibility. With a cash back card, you automatically earn a point or a rebate with any type of purchase you make on your card. Of course, the amount of rebate depends on the credit card issuer which can be from 1% to as much as 2% rebate. Despite the low rebate points of cash back credit cards, it gives the card holder the freedom to use the card in any store he prefers and still get points from all his purchases.

Rewards Credit Cards

Rewards credit cards generally give a higher percentage of points for its card holders. Most reward credit cards give as much as 5% from purchases. However, these rebate points are only limited if you make the purchase from a designated affiliate merchant.

For example, if you select a gas rewards credit card, you’re only entitled to get rebate points each time your refuel your car from affiliate gas stations. If you use your gas rewards credit card to purchase from other establishments, no points will be counted in your account.

Read Full Article on: Cash Back vs. Rewards Credit Cards

The Best Cards for Christmas Shopping

People seeking a new credit card should be aware they are much harder to obtain than they used to be, with half of all applications turned down. To have a new card ready for Christmas shopping, you need to apply soon, as most card issuers say it can take at least 10 working days for an application to be processed.

But first ask yourself: what type of shopper are you? If you will always settle your bill, you could get a cashback card, refunding a percentage of spending.

Andrew Hagger, of comparison website moneynet, said: "If you pay your balance off in full every month the interest rate is irrelevant, so you should look to get some sort of reimbursement on your shopping."

Michelle Slade, of Moneyfacts, agreed and said: "If you pay the balance in full, then a cashback credit card is a good option. That way you are earning money out of the bank rather than the other way round. American Express Platinum is offering 5pc cashback for the first three months and up to 1.5pc thereafter."

Mr Hagger tipped the new Abbey credit card, which offers 3pc back on your supermarket and petrol spend for the first six months.

You can get even more for your spending with reward points rather than cashback. For example, the Tesco Clubcard credit card is a great deal for those who buy their shopping and petrol at Tesco. Alternatively, you could look at the Partnership Card from John Lewis/Waitrose, where rewards are converted into store vouchers.

Read more at Telegraph.co.uk: Labour is 'hypocritical' on credit card interest