How Do I Pick the Best Rewards Credit Card?
Rewards credit cards are popular choices for people who want to earn cash back, discounts, frequent flier miles and other perks simply for using their credit cards. There are a variety of rewards programs geared toward a number of different groups and industries, so knowing what you're looking for is the first step in choosing the best rewards credit card for you.
Many credit card issuers that offer rewards programs tend to impose higher credit score requirements and should be kept in mind when you're exploring the different card options available on the market. If you're not sure where you stand credit wise, try Credit.com's free Credit Score Estimator to calculate your credit score — the estimator will then show you which credit card offers best fit your credit standing. By doing so, you'll have a better idea of which cards you'll most likely be approved for — and avoid unnecessary applications in the process.
You've got your airline miles rewards, reward points, cash back rewards, gas rewards, student discount rewards and the list goes on and on — but which rewards program should you choose? With so many different rewards programs available on the market, understanding the types of rewards you're looking for can help narrow down the list of cards for you to choose from. You can start by asking yourself a few simple questions.
Are you a frequent traveler who would benefit from a frequent flier mile, hotel or points program? Or a student looking for a card that offers cash back deals or discounts on gas, grocery and electronic purchases? Perhaps you enjoy dining out or attending concerts, and could benefit from a rewards card that provides coupons, gift card and merchandise. Examine each category and keep your own spending habits in mind. Do you have to spend more than you normally would to obtain the rewards? Are there limitations on how many rewards you can earn or expiration dates to redeem them? Make sure you are not required to overspend to take advantage of the rewards program.
The Fine Print: Terms and Conditions
Once you've narrowed down the list of rewards cards that meet the perks you're most interested in, be sure you read the disclosure agreement carefully so that you understand the terms and conditions. Keep in mind that rewards credit cards generally carry higher interest rates, and some may also carry an annual or membership fee. However, if you pay your bill in full each billing cycle, you can avoid the interest charges and save money.
Restrictions on Rewards
One final piece of advice before you make the final decision and apply for your perfect rewards card: know the rewards restrictions. It's very important to carefully read the rewards redemption policy outlined in the terms and conditions for any restrictions. For example, if you have chosen a rewards card that carries a frequent flier miles program, find out if there are black out dates, seat restrictions or other limitations that might affect your ability to redeem your rewards. If there is any confusion over the redemption process, don't hesitate to contact the credit card issuer for clarification.
Remember that your rewards program should work for you, not the other way around. Take a close look at the spending requirements before obtaining a card and make sure the interest rates and fees will not present problems down the road. After all, when you do find the best rewards card for you, it could help pay for that big vacation or a new grill for the backyard.
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