Do you want to earn and redeem enough credit card points so you can travel for free? If you have several cards under your belt and you’ve always had good credit, you’re in for an irresistible treat. More and more credit cards are now offering rewards and benefits that might just make your life more exciting. But before you go ahead and switch to a card with great rewards, remember that there are caveats to consider. Below are some of them you should know about:
Reward cards are not for everyone
Just because the card offers the biggest bonuses doesn’t mean it’s the perfect fit for your financial circumstance. Too often we sign-up for credit card options that sound good while forgetting to really weigh in the available options in the market. Remember that credit card issuers lure customers with alluring bonuses and irresistible rewards to get you to say yes. Unfortunately, these cards aren’t one size fits all.
Before switching to a new reward card, it’s imperative to shop around. Know your options and choose the one which is in sync with your needs and personal circumstance.
Know When to Redeem Rewards
Many people sign-up for credit cards because of the rewards but do you know that billions of reward points are never claimed every year?
You might be one of the statistics if you don’t know when to redeem your points. Don’t let what you’ve rightfully earned go to waste by making sure that you redeem yours at least a few times each year. While it’s true that collecting your points until its big enough is more attractive, you may be better off claiming smaller denominations because then you’re sure that you’re getting what the program promises. Otherwise, you only keep on spending without reaping the rewards.
Interest Rates and Fees May Be Higher
Rewards, bonuses and all those credit card promos are all great. Those are excellent incentives for consumers to keep on using their credit cards after all. But while great, they do not always outweigh the interest rates and fees that you are along the racking up along the way.
When looking for a reward card to switch to, make sure that you are also checking out annual fees and interest rate. Some cards, for example, bleed you out with hefty yearly fees. You just need to know whether the fee is worth it or not when compared side by side with the reward points that you’ll reap within the same year.
Rewards may be time-period sensitive
We’re all about the rewards that we tend to overlook the fine print that sometimes rewards are actually only redeemable during designated time periods. In order to make the most of your rewards, you need to be flexible when using it.
You have to know about the when and how. Air travel points, in particular, are hard to redeem during peak or blackout periods. In some cases, you might also earn discounts on groceries for specific months. Using the points outside the designated period may mean certain limitations where you can only use it at selected retailers. In the end, you have to be willing to adjust your spending habits in order to make the most of the rewards.
Debit cards have rewards programs too
If you have bad credit, you are not likely to get approved for a credit card that you want. But that doesn’t mean you don’t get to enjoy the rewards. There are debit cards with enticing rewards programs too that you might want to check out if you’re not eligible for a reward credit card.
Some debit cards, for example, are offering to give you points for your purchases. You can redeem them just like what you do with credit card rewards once they add up. And best of all, you don’t rack up hefty interest rates and fees with the debit cards.