Are Reward Points Credit Cards Worthwhile for You?

If you are an established credit user and make frequent credit card purchases, you may benefit from obtaining a “rewards” card. Rewards credit cards are programs that allow you to earn points whenever you use the credit card for purchases. These points can be redeemable for a wide number of ‘rewards,’ such as free airfare, free shopping gift cards, free meals at restaurants, and more.

Choosing the Appropriate Reward Points Credit Card

A rewards card used the right way can be most beneficial to you. A good strategy in finding and obtaining rewards card is from a credit card company that offers no annual fee, low interest, and does not apply finance charges until after a grace period. With good credit, you can obtain a rewards card with these benefits easily.

A rewards card with these advantages can allow you to make purchases throughout the month to increase your points. When your billing cycle ends, simply pay your existing balance in full before the grace period expires. With this strategy, you can earn a high number of points that you can redeem sooner and have no finance fees or annual fees. In essence, the credit card pays you the rewards to use their card!

Of course, not everyone has perfect credit, but you can still reap the benefits of a rewards card. The first thing you may want to consider before choosing a rewards card is the reward itself. What do you value most? Are you a frequent traveler? Would you benefit from free airfare or hotel stays? Or would you prefer to get free gasoline or free shopping when you earn points? Your rewards value will help you determine what rewards card is right for you.

Free Airfare
Many credit card banks team up with airlines to offer points toward frequent flyer miles redeemable for free airfare. If you are already a member of a frequent flyer club, this rewards program can help you earn points faster. However, if you do not fly frequently, an airlines rewards card could take you five years or more to actually earn enough points to redeem for a free flight. Be sure you can get the full advantage of frequent flyer miles before you sign up for this type of rewards card.

Free Gas or Restaurant Meals
Do you like to eat out frequently at major restaurant chains? Are you willing to accept free gas? This type of rewards card may be right for you if you drive or eat out frequently.

Free Merchandise
If you like to shop, a rewards card that offers to redeem points for free gift cards at your favorite department stores, such as Macy’s or Neiman Marcus, may be the right choice for you. Generally, you earn points when you use your charge card, and when you reach a certain point level, you can request a gift card be sent to you from the credit card company.

Cash Back
Some consumers just like to have a percentage of their credit card spending in the form of cash back as their reward. Many credit card companies will offer to give you cash back, usually up to 1% of your spending. When you reach enough points, you can request a check be sent to you, or even have the cash appear as a credit on your next billing statement.

Write to Grace Carter at grace@creditdonkey.com