Reaping the Rewards
If you are planning to apply for a new credit card, why not consider one of the many cards that offer rewards? Naturally, you’ll want to try to find a card with no annual fee, a low APR, and fees that are few. But you can find all of that and a card that offers rewards as well.
There are typically three types of rewards programs: point-based programs, cash-back programs, and frequent flier reward cards. Programs which are point-based let you earn points with your credit card purchases. You can then choose your reward through a catalog or website. If you consider one of these cards, make certain that the rewards offered are things that you actually want and will use. Also keep in mind that these points usually have an expiration date. Point-based programs may not always be as good a value as they seem, since the reward items are often overpriced. You may have to spend far more than the reward is worth to earn it. Then again, it’s still better to earn something for spending your money instead of nothing.
Frequent flyer reward cards usually benefit those people who travel often the most, hence the name. If you aren’t a frequent flyer, you probably won’t charge enough to earn a free airline ticket, because in most cases you’ll have to charge at least $25,000 a year to earn one domestic flight. In addition, airlines frequently have fees and restrictions on when and where you can fly. Of course there are always exceptions, so if this type of reward appeals to you, be sure to check into the current offers available.
For many people, cash-back cards have become the reward card of choice. More and more credit card issuers are offering bigger cash-back rebates for even everyday items like gas and groceries. It’s all about the details of the deal. You will find these details in the fine print. Even with cash-back cards, you may have to spend a certain amount each year in order to actually receive the advertised rebate. There may also be a limit to how much cash you can get back. If you compare offers carefully, however, there are also cards that offer as much as 5% cash back for certain purchases, and the redemption level can be as low as $400 in purchases.
Whatever rewards plan you choose, you will need to find out the details for redeeming your rewards. Cards may give you a timeline to use your cash-back, miles, or points. You may even be required to speak to a representative on the telephone in order to get your rebate check or other reward. That doesn’t mean that it’s not still wise to look for a credit card offer that allows you to reap the rewards along with giving you a great APR. After all, you’re going to be using that card anyway, aren’t you?
The reason that so many different credit card offers are sent out is because they make their money by earning you as their customer. In fact, credit card companies pay up to $200 to get one new customer. This fact actually gives you some leverage as the customer that they covet.
If you have a reward card, or are in the market for one, you may be able to eliminate some fees or lower the APR by negotiating with the credit card company. These cards are competing for your business, so you can make that work to your advantage. Many fees or policies that you don’t like can be negotiated because it costs credit card companies so much to simply acquire a new customer. They don’t want to lose your business if they already have it, and if they have the opportunity to turn you into a new customer, they are usually willing to work with you in order to bring that about. The key is to decide what options are important to you, read the fine print for the program you have or are considering, and then call them to discuss how they can make their card even more appealing to you. Before you know it, you’ll be reaping the rewards from the credit charges that you already make each month.