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Research: Before choosing credit cards with rewards -

Rewards credit cards are very appealing to the general public, this is because they come with the promise of rewarding you each time you use the credit card to make a purchase. The lure of the rewards that come with the credit cards is often irresistible. Hence, an increasing number of individuals end up signing up for these credit cards without understanding the underlying truth. There is more to it than meets the eye when it comes to credit cards offering rewards. It is imperative to understand the nuances of the credit card before you sign up for them.

Understanding the rewards

There are various types of rewards being offered by various credit card lenders. A few common rewards across lenders are cash back offers, air miles, gift cards and merchandize. Before you pick up the application form, it is important to ensure you opt for the rewards that you are sure to use. If you don't plan on using your credit card often for purchases, then opting for cash back rewards is going to be of no use. On the same line, if you are not planning on traveling often, then the air miles card will not prove to be worthwhile. Opt for the credit card that offers rewards that are beneficial to you.

Cost of the credit cards

When banks offer rewards on purchases made using their credit card, they make up for it by increasing the cost of the credit card. The cost of availing air miles cards and cash backs cards is definitely higher than that of the standard credit cards. So, make sure you check with the bank about the costs involved. Find out how much you will have to pay in terms of annual fees and the other charges associated with the credit card. Ensure the costs you have to pay does not outweigh the benefits. If it does, then it is better not to opt for such credit cards.

Limitations on the rewards

Though banks offer rewards for the purchases made, they also have a lot of rules and regulations governing it. Find out about the limitations beforehand, so you don't feel cheated when you are about to redeem your gifts. Ask the bank if there is a limitation on the number of rewards you can claim in a year. Also, check to see if there is any expiration date associated with the rewards. It is also important to find out if there is any minimum limit you have to reach in order to be able to claim the rewards.