With the advent of Apple and Google pay, there always seems to be a new and exciting way to buy something. Cheques are definitely a thing of the past and even cash will draw side eye glances from cashiers. Getting the best out of rewards credit cards is a great way to make your money go even further.
Although not everyone has a QR code on their phones, they will inevitably have a debit or credit card, a convenient piece of plastic to pay for the here and now, only to cause worry in the future.
With the ease of the credit card can come the ease of debt. Receiving the monthly credit card bill can be a bit of shock, even if you save every receipt. Wouldn’t it be great if there was a way to get paid to spend, as illogical as that may seem?
Or at least to earn a little something with every swipe of that credit card?
How do you get the best out of Rewards Credit Cards ?
Worry not, for your dreams might be manifested in the rewards credit card, which can be conflated as the cash back card. Basically, a credit card usually has an annual fee and charges higher interest on your purchases, if they are not paid off every month. Paying your monthly credit card bill in full is ideal, because you can then keep extra fees and interest charges from sneaking into the total amount.
However, what happens if you have a bad month (don’t we all?) Or worse, unexpected expenses accumulate? You are faced with a large figure you might not be able to handle, which begs the thought, perhaps your current credit card isn’t the best for you.
There are alternatives to the big named credit cards and your local bank might even have a few tempting offers, including a low interest card and/or one with no annual fee. These are definitely worth investigating as is the rewards credit card.
Make More on Everyday Spending
What exactly is this shining beacon of credit hope?
It may seem counterintuitive, but a rewards card offers an incentive or reward for using it. The reward may take the form of cash, discounts, frequent flyer miles, gift cards or points that are applicable to a wide variety of perks.
Therefore, you literally are receiving a reward of some kind, every time you pull out your plastic when you are shopping, dining or traveling.
There are different types of rewards cards, so it is important to do research first, to ascertain which one best suits your life style. If you want cash only, there are some that provide this. They are straightforward and easy to use, but might not pay you in cold hard cash, but rather cash rewards to your bank account or your credit card account, to help reduce that balance.
Other cards offer points which can be redeemed for merchandise, including gift cards and plane tickets. Gift cards appear to be a shrewd option since the merchant partners give 10% to 20% of off the standard gift card price.
Get Paid for Your Expenses
Miles or travel reward cards provide miles with each purchase. With those miles, you will be able to purchase plane tickets for reduced prices or even for free, depending upon the fine print of the card terms.
Hotel reward cards and auto reward cards operate in a similar manner, with the opportunity to redeem free or less expensive hotel rooms and rental cars.
It is not just banks that offer reward cards but also investment firms, which apply the points and/or cash to your investment account, and some mortgage companies, which do the same except for your mortgage payment.
Depending upon your lifestyle and spending habits, a rewards credit card can be used to save money in a variety of ways, including paying your credit card bill, paying your mortgage and investing in a savings account. You can travel for free, buy free birthday presents, and purchase gift cards at a lower price.
Some Things to Consider
However, there are a few things to consider about a rewards credit card.
Higher fees
Usually, they carry a higher annual fee and higher interest rate, so be diligent in reading the terms and conditions and paying the monthly bill in total. The rewards programs can be far from simple, with certain spending and amount restrictions. Redeeming rewards might be tricky as well, and some might have to be done in a particular time frame.
How does your credit score measure up?
Overall, they are usually offered to people with high credit scores. If your credit is not good, then you will have a difficult time qualifying for a rewards card.
Nonetheless, even if you are a responsible shopper and customer, there is a chance that constantly chasing rewards and using the card will result in a large credit card bill, so keep an eye on your spending, which is sound advice for everyone. Reward credit cards do offer the chance to be a smart shopper and to save money.
Research
Getting the best out of a rewards credit card will entail some research on your part, as you must examine the rates, the annual fee (if applicable) and the actual rewards themselves.
It is nice to think that buying that pair of fabulous shoes means there will be extra change in your account or a business class upgrade. If those shoes really will pay for themselves, then you have found the perfect card.