Rewards are one of the top reasons people will want to sign up for a credit card. But is it worth the hype? What can rewards get you? How do you choose the best credit card rewards program for you?
The most common reward systems will provide you with discounts and deals on flights. This will include seat upgrades, frequent flyer points, discounts or free flights, and access to special airport services. If you are someone who travels a lot, or is saving up for a big trip in the future, a credit card with flight rewards may be the one for you. Be sure to read the terms carefully, as you may find that the rewards are not all they seem to be.
Cash-back programs will simply reward you with a cash refund on some of your purchases. The refund will usually be around 0.5 to 1% of your spendings. A cash-back rewards program may benefit anyone who wishes to put all of their expenses on to their credit card, to maximise cash-back. If you choose this option, be wary of your purchases, and avoid shopping just for the sake of getting cash back. Remember that the cash-back is only equivalent to a 0.5 or 1% discount on purchases (depending on your bank).
Credit card benefits can usually be received instantly, as the user will not be required to save up points to redeem. Benefits often include discounts at specific stores, or special offers on purchases. Oftentimes, these reward programs are not worth the investment. Many people will consistently forget about their benefits and not utilise them at all. If you are considering this rewards program, consider the available discounts and determine if you will utilise them enough.
Some credit cards will offer gifts to users, such as concert tickets, gift cards, hotel rooms, or tours. These gifts, while lovely, may not benefit most people in a meaningful way. Oftentimes, you will have to redeem the gifts on the company’s terms, which could result in missing out on free concerts due to bad timing, or having to take holidays in the off-season. If you live a flexible lifestyle and enjoy spontaneity, this program may be for you.
Most importantly, you will need to assess if the cost of procuring the credit card will pay off in the form of rewards. Crunch the numbers and consider all options before you take the plunge.
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