Ignoring Rewards Card Offers
Credit card companies are constantly trying to entice people into requesting more credit cards. They have turned to improved products, such as better protection against fraud, fewer fees and restrictions, and within the past several years, the appearance of more and more rewards cards.
While improvements such as better fraud protection are great, getting swamped by rewards cards can be a little irritating. Every day in the mail there is just one more credit card offer claiming to be the greatest yet, and what do you know? You’re pre-approved for it. But what could be so bad about a rewards card? What is it that makes it any different from another credit card aside from the reward part?
When to Forget It
Rewards cards have their ups and downs. Getting one depends upon each individual person and his or her present financial needs and management abilities. Because credit card companies thrive on interest charges, people who look for great rewards tend to put as much as possible on their cards. While this can be an okay choice, if you don’t have plans to pay your balance in full each and every month, it may backfire. Rewards cards tend to come with relatively high interest rates. In which case, if you currently have a credit card with a 7.99% APR and you get a rewards card that has a 23.99% APR, you’re going to be in for an unpleasant interest hike. Paying extra finance charges can negate the whole idea of obtaining rewards – that extra interest money could easily be put toward the reward itself, which means you aren’t getting much of anything for free.
Unless you can find a rewards card available to you that is worth bothering with, you might as well skip it. If you have bad credit, it means worse terms and conditions, so your APR will remain high, your limit low, and irresponsible handling of the card can mean very few rewards and a lot of setbacks. Good enough credit means you could start looking, but you want to make sure the card is worth the effort. A points card should give you at least a few points per dollar spent. One point per dollar is not a very good deal when there are cards out there offering one point per penny. The same goes for cash back cards and airline miles cards. Fees and restrictions can also apply, and if you can’t find anything suitable, you are better off without it.
When to Go For It
Good credit, a sharp eye, and a responsible handling of money can rake in extra goodies. Paying your balance off in full each month not only keeps you on top of your financial transactions, but also keeps you from paying any extra interest. Even if a card has a high interest rate, if you have no balance then it doesn’t matter. Should you find some great cards that offer multiple points, airline miles, or a high percentage of cash back, it could be a great deal. Likewise, if you see the fine print is full of fine things with little to no fees or restrictions, things are looking good for you, the card, and your future rewards.
As long as you know the kinds of rewards you want, choose the right card, and stay on top of your funds, you could easily enjoy the benefits of your actions. In that case, ignoring a rewards card might be a loss for you, especially if you deserve a little extra.