Drug testing

Rewards Cards: Are They Worth It?

Virtually all consumers will have a credit card at some point in their lives. Is this an understatement? Probably, as most consumers carry multiple credit cards. Selecting a credit card should not be something taken lightly; card companies are constantly looking for new consumers, but only after wisely comparing offers should you select a provider. Pick a company that will give to you a reasonable rate and one that incentivizes their program with some type of reward for using their card.

So, how do rewards cards work? Almost without fail, rewards cards typically give consumers money back on their purchases [usually 1-2%] or allow you to accumulate points toward prizes or discounts on future purchases. If you charge $10,000. per year [not hard to do if you charge your groceries] and your rewards card pays you a 2% reward on purchases, you will receive $200. from the company. Usually you will gain the funds in the form of several credits to your account spread out over the course of a year, but in some cases you will receive the rewards in the form of a check.

Rewards cards are free money, right? Only if you do not have to pay an annual fee and you pay your credit card off every month. If you do not pay your card off every month, your reward could easily be overshadowed by monthly interest payments, especially if your interest rate is high. Not too many companies pay rewards and give you a low rate at the same time. In theory, even if you carry balances for as little as 2-3 months before paying your card off you could find your rewards for the entire year outweighed by finance charges.

When rewards are given in the form of points that you later can redeem for prizes or take discounts on future purchases, you need to consider the following when selecting your card:

1. Is the reward program for something you know you will use? For example, if you are a member of GM's rewards program, are you certain that you will be purchasing a GM product in the future? If so, go with this card as the return can be as high as 5%.

2. Is there an annual cap on purchases? Many rewards cards will limit to you the amount of cash back funds or rewards points you can accumulate in one year. Most people never come close to the figure, but if you are a business traveler you can quickly approach and pass these limitations within the year.

3. Do points eventually drop off? The majority of rewards cards only allow you to accumulate points for three years before they begin to drop off. If your next car purchase is five years away and you have a program that drops off points, you could find the first two years of card usage to be a waste as those points would vanish. If you still want that particular rewards card, only use it in years 3, 4, and 5 so that when it comes time to purchase your new car you will not have lost any points. You could consider getting and using another rewards card for a different rewards system to cover years 1 and 2.

All in all, rewards cards can be a useful option for the savvy consumer. Remember, points do fall off and carrying balances from month to month will wipe out the value of the card in short order. By showing plenty of discipline you can make rewards cards work well for you.

Matt is a writer, web designer, and marketing manager based in North Carolina, USA. Matt writes on a variety of subjections related to business and travel. His primary website is for business flight attendants and can be found here: http://www.corporateflyer.net.

limousine chicago service
In The News:

Errors on Your Credit Report: What You Should Do

There are times when you may be turned down for... Read More

How To Use Your Credit Card For Ultimate Financial Advantage

Using a credit card wisely is an important step in... Read More

How To Boost Your Credit Score

Years ago your credit score was a big secret, known... Read More

Reward Credit Cards: Get the Best Rewards Card Incentive Program

A good credit reward card can contribute to your retirement... Read More

New Credit Scoring Model Could Help Millions

Mark and Beth, a young married couple in their twenties,... Read More

7 Ways To Squash Identity Theft

It is the scourge of our age: identity theft. Thieves... Read More

SuperCharged Secret 5, Credit Card Utopia

LIVING IN CREDIT CARD UTOPIALet's just take a brief moment... Read More

Comprehending a Credit Report

Obtaining a credit report is an excellent way to begin... Read More

Consumer Credit Reports

A consumer credit report is a factual record of an... Read More

Is Your Credit Score Being Held Against You?

Credit Scores That HurtIs your credit score being held against... Read More

How Can A Qualified Mortgage Consultant Help Boost Your Credit Scores?

Consumers interested in purchasing or refinancing a home will pay... Read More

Dont Fall for Credit Repair Scams

We've all seen the ads on television or in magazines,... Read More

Tips for Credit Card Surfers

Moving money from credit card to credit card to take... Read More

How To Choose Your Credit Card Application

The articles and tips provided on this site are intended... Read More

All About Balance Transfers

What is a balance transfer?A balance transfer can be explained... Read More

Free Credit Report ? A Website Typo Could Be Costly

In 2003, Congress passed the Fair and Accurate Credit Transactions... Read More

What Is A Credit Report?

Even if you have heard of a credit report, you... Read More

The Right Way To Credit Repair

If you have a bad credit rating, then you might... Read More

Improving Your Credit Report

Even if you think you have a wonderful credit report,... Read More

Student Credit Cards 101

Almost all students have and use student credit cards. Some... Read More

ChexSystems: Who They Are and How it Affects You

ChexSystems is a company that maintains a subscriber membership service... Read More

Shoppers Beware - Tis The Season

It's the number one complaint from consumers and it only... Read More

Choosing A New Credit Card

1. Choosing A new credit cardThere are many reasons for... Read More

Avoiding College Credit Card Traps

Congratulations college freshman! You're about to embark on one of... Read More

Commercial Collections And Credit Granting

It is estimated that billions of dollars in delinquent commercial... Read More

roadway induction street lighting standards Pete's produce ..