Pros and cons of various credit card rewards

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Credit Card Applications » Research » Guides » Travel with Credit Cards » Pros and cons of various credit card rewards

Pros and cons of various credit card rewards


Updated: December 26, 2012

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Credit cards serve a different purpose for different users. Many users keep a credit card as a tool to pay for transactions. But a few individuals do use credit cards as a necessity. This is bad as it can lead to debt if the money borrowed is not paid within the grace period. But for all those who use credit cards for the ease of paying for things, there are a number of reward schemes that you can look at and take advantage of.

Each reward scheme is designed with an intention to cater to a different type of customer. Credit card companies offer different reward programs, offers and other features that make every card unique in its own way. You need to choose a card that is a good fit for your personal needs.

The air miles rewards scheme:

Pros:

  • Its gives air miles for every dollar that is spent on the card.
  • The points that you accumulate can be redeemed when you purchase an airline ticket.
  • It is useful for business men who travel around a lot and also frequent vacationers.
  • It can be combined with reward programs that the airline is offering.
  • The reward scheme can include free accommodation, airport pick up and drop, and even tickets to amusement parks and other attractions.
Cons:
  • It may be limited to a certain number of participating airline companies and the destinations might also be limited in scope.
  • This credit card will usually have an annual fee.
  • There will be a certain date within which the points must be redeemed, and hence you will have to make your travel plans according to this date.

The points based reward scheme

Pros:

  • It accumulates points based on the number of times you swipe your card or the amount you spend in dollars.
  • The points can be redeemed for either cash or gifts.
  • It is best for people who use their cards every day for all and various purchases.
  • It will also provide certain discounts at select stores for grocery and even other goods.
  • The cash that you can redeem will be directly credited to your account at the end of the year.
Cons:
  • The points will have a certain lower and upper limit. You need to redeem them within a certain time frame and failing to do may cause you to lose your points.
  • They cannot be redeemed if you cross the upper or lower limit and will be forfeited.
  • Certain purchases from non participating stores will not count towards redemption.

The gas points reward program

Pros:

  • It will provide points on every dollar that is spent on gasoline.
  • It can be redeemed for cash or gasoline gallons.
  • It is best for people who use an automobile regularly for commute or business.
Cons:
  • It may be limited to certain participating gas stations and oil companies.
  • It will not offer much flexibility when it comes to rewards and discounts on other goods.

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