How to avoid getting swindled with credit card reward programs

Advertising Disclosure

Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Travel with Credit Cards » How to avoid getting swindled with credit card reward programs

How to avoid getting swindled with credit card reward programs


Updated: December 26, 2012

By
Add to Favorites:
A lot of credit card companies offer varying rewards schemes these days with the intention to lure more customers. While many of these reward schemes actually make good financial sense, a lot of them can make you lose a lot of money if you do not think about it in advance. This is because the reward schemes will almost always require an annual fee, in order to take advantage of the program that is being offered. The common reward programs involve a point`s based system. The more you spend in dollars, or the more times you swipe your card, the more points you will earn. You can use these points to get cash back into your attached account or gifts from a catalogue that will be provided to you by the bank. It is better to go for the gifts as it will amount to a lot more in dollar value. The thing to remember, is that if you do not use your credit card often, then you will end up losing more than what you are paying for the credit card annually. The annual fee may be around $25 for such an offer, so if you do not use your credit card for at least a $300 purchase every month, you end up not making up for this amount. It`s not only about using your credit card regularly; it is about using it at the right places. Only a few stores are affiliated to the bank, and only these stores will offer the rewards points. If you do not make your purchase at those stores, you will not earn any reward points. You also need to remember to pay off the dues every month by the end of the grace period. If you do not pay by this time, your credit score will suffer. Along with this, you will also have to pay a huge amount of money to the bank in the form of interest. This can work out to a large amount, as credit card interest rates increase up to 20%. Along with these points based system programs, there are other reward schemes like air miles schemes and gasoline miles schemes. If you go for an air miles scheme, you can earn air miles for every transaction that you make, for every dollar that you spend. Again, this is of no use if you are not going to travel in the near future. These reward points will have a validity period within which you need to use them, failing which they will be forfeited. If you do not have time to travel due to work commitments, then you will find that this is a wasted investment. For the gasoline miles program, you need to use your car more often and not just for weekly commutes for it to work out. Travel agencies are one type of users who get to take maximum advantage of this scheme.

Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Other Travel with Credit Cards Research:

Related Research:

Interest Free Credit Cards: Pay No Interest Until 2019

Interest Free Credit Cards: Pay No Interest Until 2019

By Credit-Land, Posted: May 23, 2017

Carrying a balance on a credit card is wasting your money on interest fees. It is easy to avoid interest payments on purchase transactions by paying off the entire card balance by the due date each month. But what to do if you are already ... Continue reading
Dashlane: Password Management and Shopping Ease in One Simple Product

Dashlane: Password Management and Shopping Ease in One Simple Product

By Angela Rose, Posted: May 3, 2017

Are you terrible at remembering passwords? Are you so terrible, in fact, that you often use the same one for multiple websites? If so, you’re not alone. Continue reading
SoFi Making Lending Social

SoFi Making Lending Social

By Dar Dowling, Posted: April 26, 2017

Since 2011 SoFi, a San Francisco based online lending company, took the lending industry by storm, when they became the first online lender giving people access to affordable student loan refinancing. Continue reading