A good rewards programme that comes with your credit card can have all the appeal of feeling you’re getting something for nothing. You‚’e not, of course, but it just feels that way.
When you’re shopping around for a credit card and you’re looking for those little extras that might just sway your decision, it’s helpful to take stock of yourself, your personality and your spending habits when deciding which credit card suits you best.
Choose Rewards Schemes Carefully
For example, if you’re a frequent traveller and your card is used to pay hotel bills, restaurant meals and similar expenses, then having a credit card rewards scheme that gives you a free sewing machine or a supermarket discount voucher is unlikely to bring a big smile to your face.
By the same token, if your usual credit card spending is limited to the occasional purchase that doesn’t get you a lot of rewards points in a reasonable time, then you’re unlikely to want a rewards programme that makes you build up a lot of points before you get that fortnight’s holiday in Tahiti.
The Better Programme, The Bigger Fee
Generally, you can spot which type of rewards programme comes with a credit card by the size of the annual fee it attracts. The more generous the reward programme, the higher the annual fee will be. Conversely, if the annual fee is small or non-existent, the more likely it is that the rewards programme will be of a more general nature.
No matter what rewards programme you eventually choose, it’s generally the case that the number of rewards points you accumulate is directly related to the amount of money you spend with that rewards credit card. In other words, if the rewards programme is highly attractive to you, there’s a very strong incentive for you to spend more and more so you can reach your rewards points goal.
Make Your Credit Card Payments
And therein lies the danger. It’s all very well racking up the rewards points, but you must make regular credit card payments so you can avoid high interest fees on your monthly statement. That’s worth emphasising – credit card payments are the reverse side of rewards programmes. You must make one to enjoy the other and credit card payments are absolutely necessary.
Otherwise, you’ll find the interest charges are more than the value of the reward you gained from all that spending. It’s really no fun winning a holiday in Tahiti only to find you can’t afford the bar bill.
