The drawbacks of rewards credit cards
Advertising Disclosure is an independent, advertising-supported web site. 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. has not reviewed all available credit card offers in the marketplace.
Credit Card Applications » Research » Guides » Travel with Credit Cards » The drawbacks of rewards credit cards

The drawbacks of rewards credit cards

Updated: December 26, 2012

Add to Favorites:

Most people in various parts of the world assume that credit cards that carry rewards are better than the standard credit cards. However, this is far from the truth. There are a lot of drawbacks associated with rewards credit cards and it is important to understand them before falling prey and increasing your debts. Let us take a quick look at why these rewards credit cards can be unrewarding.

Unusable rewards

Most of the credit cards that carry rewards, though are offered to the common person, do not carry the type of rewards that they can use. Most of them offer cash back offers, discounts, gift cards and air miles that a common working person will not use too often. If you don't shop often, eat out frequently or travel by air often, these rewards are as good as non-existent.

Cost involved

If you think that banks are rewarding you for purchases you make using the rewards card, think again! Though it is true that banks do offer the rewards, there are a lot of costs levied on them in order to make up for the reward points. It is not surprising then that the air miles card costs more than a cash back card which is definitely higher than the standard card. Based on the rewards offered on the card, the cost also increases. The annual fees and interest rates on reward cards are definitely on the higher end of price spectrum.

Earn more to claim less

Did you know that you have to spend thousands of dollars to claim rewards that cost a few hundred dollars? Surprising, but true! This is how credit card lenders make money by outwitting the common man. The limits set are so high that a person has to pay through their teeth before being eligible to claim the rewards. To add to their woes, there is also the expiration date. If you do not redeem your rewards within the time limit specified by the bank, the points will revert to zero and you will have to start from the scratch again.

Increased debt

In order to claim that elusive reward you will have to spend a lot of time just to find out that the reward points are not worth it, in comparison to the fees and interest rates being charged.

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:

Credit Cards to Save More on Holiday Shopping

By Herbert Moore, Posted: November 22, 2016

Discounts and special offers are available all year round. Werther you are a bargain hunter or an impulse buyer, make sure you check online discounts and special offers. Also, if you are a cardholder, see if your credit card opens the door ... Continue reading

How to Get Free Wi-Fi in the Air

By Herbert Moore, Posted: September 28, 2016

Sometimes in-flight Wi-Fi is the bare necessity when you travel abroad or within the country. However not all airlines offer free in-flight Wi-Fi. There is only a couple of airlines that will allow you to use Wi-Fi ... Continue reading

Amazon Credit Cards Review

By Allison Martin, Posted: May 30, 2016

When was launched 20 years ago, few could have envisioned how far the company would come. What was once an online specialty bookstore is now an Internet juggernaut that sells nearly anything and has made major inroads into ... Continue reading