Limits card issuers put on credit card rewards

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 » Limits card issuers put on credit card rewards

Limits card issuers put on credit card rewards


Updated: December 26, 2012

Add to Favorites:

Credit card reward programs are used by credit card companies to lure customers into applying for these cards and also to tempt them into spending more. However, credit card rewards are not always as rewarding as they seem to credit card customers. Credit card issuers put a lot of limits on these reward programs which in a way undermines the benefits of these reward programs.

Annual limits

A credit card might be promoted for loyalty points that can be redeemed for cash. However, on the fine print credit card companies might end up mentioning that in a given year, you could only redeem a stipulated amount of points and not more even if you have collected a lot of reward points.

Monthly limits

Apart from annual limits, card issuers might also put limits on a monthly basis on how many points you could redeem. Although there is no limit on the points you can collect, you need to know you cannot redeem them even if you have a lot of them.

Select merchants and merchandise

Sometimes the reward programs might be totally useless. Credit card issuers might allow you to redeem your loyalty points in the form of discounts on select merchandise, which you may not even need or want to spend on. Similarly, the points could be redeemable only at select merchants, which you may not prefer or where the items are highly overpriced.

Discounts that can be availed after select purchases

There are some reward programs, which instead of benefiting you will actually end up making you spend a lot more. This means that the reward points can be availed in the form of discounts e.g. only if you have purchases merchandise worth a fixed amount. This means, if you don't purchase anything you lose your reward points and if you want to use them, you have to spend more money.

Expiry

Strict expiration dates are set on redeeming your reward points. Sometimes they expire every month or couple of months. It might not always be possible to redeem every month and if you cannot keep these points to redeem when you want to, they are not really beneficial.

Overall Cap

Irrespective of how many points you have collected, there might be a limit to how many you can redeem or get your cash back for. So although the card is promoted as 5% cash back, the terms might have a cap at 50 dollars per month for example.

All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products’ Terms & Conditions on the issuing banks' websites.
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:

How to Earn on Black Friday Deals in 2017

How to Earn on Black Friday Deals in 2017

Posted: November 23, 2017

Black Friday is around the corner! Ready, steady, go! But before you go on a shopping spree to catch the jaw-dropping deals and discounts, make sure you maximize them. Did you know that you can not only save on Black Friday, but also earn? ... Continue reading
Autumn 2017: Best Rewards Credit Cards for Thanksgiving Shopping

Autumn 2017: Best Rewards Credit Cards for Thanksgiving Shopping

Posted: November 20, 2017

Thanksgiving is coming, and whether you are hosting a meal or coming as a guest, your spendings are going to accumulate faster than you can notice. A holiday feast is a costly matter – each year Americans spend around $50 on a Thanksgiving ... Continue reading
Top 5 Cards for Travel from Our Partners Autumn 2017 – Expert Choice

Top 5 Cards for Travel from Our Partners Autumn 2017 – Expert Choice

Posted: November 8, 2017

Nights are drawing out, the wind is colder every day and you already feel the lightest breath of winter on your face - autumn is here. Holidays are over, kids are back to school and all you are left with are hefty holiday bills that you ... Continue reading