Rewards Credit Cards
The best rewards credit cards
Credit Card Reward Programs ‘reward' you for spending by giving you ‘points’ for every dollar spent. Eventually when you accumulate enough points you can use them to redeem a gift or benefit. Credit cards don’t all come with rewards programs in fact you can get credit cards with no rewards programs at all. Reward cards provide an incentive to spend and a temptation to spend money needlessly to earn points.
The best rewards credit cards provide you with all the extras you need and nothing more at the lowest possible price. Not surprisingly, the better the rewards the costlier the card to hold and to use. This is of course because rewards programs are expensive to develop and maintain so ideally you don’t want to be paying for a card with fancy extras if you don’t intend on taking them up.
Types of Reward Programs
Today’s credit card reward programs are dynamic and sophisticated regimes used to excite and entice spenders. Lenders are offering discount and savings packages from travel rewards for hotel suites and flights to cash back rewards. Some credit cards now allow the linkage of other reward programs such as frequent flyer points. Others offer shopping vouchers and gift cards, dining experiences and much more.
Costs and benefits of credit card reward programs
Costs: The extravagance of a rewards program is reflected in annual credit card fee which in some cases can breach the $300 mark. These cards also provide the temptation to spend unnecessarily.
Benefits: the benefits of rewards programs are endless. They can include VIP lounges, discount holidays, hotel accommodation, travel insurance and frequent flyer flights. The idea is that if you were going to spend anyways, you may as well be rewarded for it.
Which rewards credit card is right for you?
Which card's reward program is right for you depend on what you use for card for, how often you use it and how much money you spend per annum. Before you begin reading credit card comparisons you must ask yourself is whether you value a rewards program more than a cheap card. The next question to ask is what type of rewards matter most to you. It may be that you are already a frequent flyer member and wish to supplement those points with your credit card spending. Or maybe you want to be rewarded for spending but are not entirely happy with gifts and discounts offered then maybe a card with cash back rewards is the way to go. Or if you travel frequently maybe a card with travel benefits including travel insurance and hotel accommodation is best for you. The last consideration to be made regards the cost of these cards. The more bells and whistles, the higher the annual fee usually is. Whatever it is the rewards program for you really does come down to who you are and how you like to spend.
Published: 3 December 2010