Credit Cards: Reward card is a good deal!!
Reward Cards are Credit Cards that offer a wide array of discounts and rewards based on usage. From discounts and gifts on redemption of reward points, and cash-backs, rewards make the credit card an ideal means of spending. Reward Cards are a boon to those who use their cards wisely, and don’t carry over balances. To a person who carries balance, the reward card really does no good.
Business travelers love these cards. Airline companies offer credit cards with frequent flier reward points that can be converted to free tickets/hotel stays/vacations etc. Some auto cards in the market give you a great price off on purchase of a new car.
With so many options available in the market, are you making full use of your credit card? Is your credit card providing you with maximum rewards? Well the answer depends primarily on your spending pattern. There are cards in the market that suit your needs, you only need to work up some math and get the best deal! For those who use the card and carry over balances, strictly stay away from reward cards (even if they come with a 0% offer). You will end up paying a lot more by way of interest in exchange for small rewards.
How do you choose a card that gives you the best deal in rewards?
To answer this question, you need to sit down and work out your spending pattern. It is important to understand two things: what you spend and where. Don’t look at a card that offers you a better deal for spending on a product that you really don’t need. You must know what you need and then find the best card to reward you for making that purchase.
You must now understand how the reward points get accumulated. Find out how much you need to spend on what product in order to start accumulating points. Some cards reward you more on certain purchases, so you must make sure that you are using the right card for the right purchase. How soon do such reward points expire? Some cards allow you perpetual carry over of reward points (Frequent Flier cards). This will again help you decide on which card would suit you the best.
Some cards limit the amount of rewards you can earn in a year. If your spending pattern is on the higher side, choose to have another similar reward card and apportion your spend between the two.
How fast do you want to convert your accumulated reward points?
How do you wish to redeem the reward points?
These questions will help you choose the better card for you. If you are a frequent flier on a single airline, make sure you choose a card that has an official tie-up with the airline. This will give you maximum rewards. If entertainment is your kind of reward, choose a card that allows you to shop for DVD, movie tickets in exchange for reward points. Go ahead and choose your card wisely because there are great rewards up for grabs, if you use the card well!!
