Although credit cards can help you save money and especially the reward cards, on the other hand, there are things you need to check to avoid getting penalized and suffering unnecessary costs. First, some credit cards have cash back that drop off with time. This means that if you have not attained the eligible perks’ qualification mark, you will lose out all the points, miles, cashrebates, and other rewards that were attached to the card.
Before you choose any reward card, you need to ensure that you can meet up to the expectations on spending. Some cards offer some high percentages on cashrebates for example, 5 percent but after you have reached a certain amount in purchases, the rates tend to go down significantly to either 1 percent or something similar. This means that you only enjoy high rates of cashbacks on a limited time and after that, you end up only earning very little in cashrebates. One way you can get yourself out of such traps is by reading the fine prints and every detail of the perk.
The second thing you need to check is reward cards that do not apply to you. Not all reward cards are suitable for every other consumer. A frequent flyer will need an airline miles and hotel reward card. A mum who spends much on household budget will need a card that offers good perks on gas, groceries and other household stuff. Similarly, a dad who plans to do major renovations within the year may need a home improvements reward card that enables him to save on building materials and supplies when remodelling or constructing a new home.
For a miles credit card, it would be good to collect the flyer miles as they enable you to get free tickets to certain destinations. This is an ideal choice for the frequent business flyer. Therefore, if you are a homebody and you do not like travelling whether for pleasure, business or work related purposes, then this may not be a good card for. You will be wasting your time swiping the card that otherwise it is intended for airline rewards. You may risk racking up more debt on a card that you may not use at all.
The general rule is that if a card does not match your spending patterns you would better do without it or seek one that goes with your spending habits. The third aspect you need to consider is the rewards that do not vanish. In order to understand the limits that are attached to a reward card, you need to read and comprehend the fine print. Some cards have clauses which can compel you to forfeit your rewards if you have not used the card for a certain period say 12 months.
Therefore, if you are inactive for about 12 months it means that you may lose all the privileges including the rewards that you had acquired from the cards such as the points. In the same way, you may also lose your rewards if you experience a late or missed payment of your card balance. There are expiry dates on rewards cards, which mean that if you do not use your perks like cash backs within a specified period, when the expiry date reaches, you lose the perks automatically. These are some of the clauses that you must check when choosing a reward card. Otherwise, you may end up incurring the costs of using the card without benefiting in any way.