You need to consider a few things before you sign up for a rewards credit card. Below are some requirements that need to be considered before requesting a credit rewards card.
DO YOU HAVE A GOOD CREDIT SCORE?
Bigger rewards go to those who own a higher credit score. Having an accumulated balance in rewards Credit card leads to more interest charges than rewards. Higher credit score offers you the opportunity to sign up for a reward card with a higher credit line but low-interest rate. It is suggested you cease from signing up for a rewards credit card if you are unable to clear your monthly dues to avoid spending in interest than earning in rewards. Below are a few points you should consider if you’re planning to get a reward credit card.
GO FOR THE RIGHT REWARDS CREDIT CARD THAT SUITES YOU BEST:
Rewards credit cards are of three different types. Namely-the loyalty, the general reward, and the cash back programs reward credit card. Each rewards Credit Card offers a unique service to the cardholder.
The cash back rewards credit card offers cash back to cardholders. It comes in form of a statement credit, a variety of program in the rate of earned cash back, and check or direct deposit. The Cobranded ( Loyalty) rewards credit card gives cardholders opportunity to earn points. The points could be used on a few brands while the general rewards credit card allow cardholders to redeem points for travel, cash back, merchandise and from other rewards. The quicksilver cash rewards credit card is an example. Rewards can be redeemed as a statement credit with unlimited 1.5 percent cash back on every purchase you make with your rewards credit card. Rewards cannot be rotated. All you need do is to cash back at a flat rate each time you make a purchase. Then your rewards remain active as long as your account remains open.
Loyalty reward credit card:
The Loyalty rewards credit card has categories that allow cardholders transfer points or miles earned to other cardholders. Also, points redeemed can be used for purchases from given brands such as hotels and airlines. Points or credit earned from Loyalty Rewards Credit Card remains active as long as cardholder keeps earning points, redeeming already earned points and maintains an open account. An example is the Alaska Airline Visa Signature Credit card.
General Rewards Credit Card:
This offers cardholders multiple redemption options. For every one dollar spent from your General rewarded credit card, you are entitled to a point. Also, some points are earned when you make a purchase with your General rewards credit card from drugstores, gas stations, and grocery stores. Cards that offer travel reward are also available but only redeemable after a travel purchase. It is more flexible when compared to Loyalty and Cash back rewards credit card.
UNDERSTAND YOUR BENEFIT AS A CREDIT CARD HOLDER
Complimentary roadside assistance, travel insurance, waived baggage fees, fraud protection, auto rental insurance can save you lots of dollars yearly. Consider the benefits attached to each card before you sign up for it because credit card holder benefit is valuable.
Barclaycard Arrival plus World Elite MasterCard is an example of a travel credit card. Travelers who are cardholders do not pay a foreign transaction fee and enjoys the steady service provided by World Elite Concierge.
Another is the Hilton Honors Gold American Express Ascend Card. It offers credit card holders guaranteed discount, a changeable and refundable ticket for the hotel, a free fifth night on each five-night booking, standard internet access at selected hotels, travel, accident insurance, car rental loss, and damage.
Calculate your benefit as a credit card holder with an annual fee, and then compare it with one that does not demand that. Rewards credit card that offer bonuses and points to cardholders usually have an annual fee. If you are not earning many rewards as a cardholder, it won’t be suggested you pay an annual fee. Thus, it will be nice you calculate your earnings with a rewards card that requires an annual fee but offers valuable perk than one that doesn’t but offers lower rewards.
CALCULATE YOUR EARNING POTENTIALS BASED ON WHAT YOU SPEND MOST
While signing up for a reward credit card, consider the reward items which offer higher perks on items you spend most. If you are a constant traveler, it is suggested you sign up for the Chase Sapphire Preferred Credit Card. Cardholders earn a point per dollar spent on purchases and two points on travel and dining. When travel points award are redeemed through Chase Ultimate Reward, you can earn 25 percent value and this also applies to hotels, airfare, car rentals, and cruises. If you also use airlines, it is best you spend on the Citi®/AAdvantage® Platinum Select® World Elite™ MasterCard®. It offers one mile on each dollar spent on purchases and two miles on every dollar spent on restaurants, gas stations, and American Airlines. Cardholders also, benefit on gas, hotels, groceries, and business
CONSIDER SIGN-UP BONUSES.
Point valuation differs with each rewards card. It is important you calculate your earnings by having one program compared to another. For example, the Capital One Venture Rewards Credit Cardholders earns 50,000 miles as one- time bonus which is equivalent to $500 in travel when they spend $3,000 within the first 90 days of account opening while the Capital One Quicksilver Cash Rewards Credit Card offers cardholders one-time bonus of $150 but demands purchase of $500items from the account within the first 90 days of account opening. Moreover, reward cards that offer large bonuses are only trying to get more people signed up.
It is sometimes better to own two different reward credit cards so as to maximize your earnings. A single credit card might not offer you all you need; one might earn you a bonus from groceries while the other takes care of your travel. According to Steele, this suggestion is not for everyone especially if you always try to clear your balances. Do the calculation on your own and choose the right Rewards Credit Card for you.