Benefits and disadvantages of credit card rewards

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most 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 » Benefits and disadvantages of credit card rewards

Benefits and disadvantages of credit card rewards


Updated: December 26, 2012

The content is accurate at the time of publication and is subject to change.
Credit card customers need to educate themselves on which card rewards are worth acquiring and, which shouldn`t. In fact, some of the rewards are only disguised to lure the customers into spending. Therefore, there are two sides to a given situation. Customers should look at credit card rewards as a way of obtaining savings, rather than to make purchases, specifically, in order to get points, every single time. As long as they don`t throw away their money or increase the outstanding balance, it is fine to let go of some rewards like discounts after milestone expenses. Benefits of credit card rewards Credit card rewards are special as they add value to purchases made. It is nice to get 1% cash back on your purchases. Most credit card users` bargain for small savings and along with the cash back offers as these ensure that one saves, when they are shopping. Another benefit of credit card is that, it is a reward for consistency. The more consistent a customer is in terms of spending carefully and then paying back promptly, the better will be his or her credit score and rewards offered. It is, encouraging from a customer`s point of view, to be maintaining a good credit score and use the credit card to make frequent purchases. This also gives you an expenditure report at the end of the month, allowing you to monitor your expenses. Cash expenses are hard to track. Credit card rewards are also like Christmas gifts, because you keep accumulating points over a year, and then you get the opportunity to cash in and save a few dollars or sometimes even more than that. Disadvantages of having credit card rewards If your credit card offers you a 25% discount by spending 200 dollars at a store, then you are already in a dilemma. It might appear to save 50 dollars on your purchase is substantial. However, if you were planning to buy something worth 25 dollars and spent 200 dollars it is not really good. If at the end of the month, the extra hundred or so dollars cause you to miss the bill payment deadline, your outstanding balance increases due to the late fees along with an added interest. These put together would erase the saving you made. Therefore, milestone expenses should be avoided. Another disadvantage with these rewards is that most of them barring cash back, favor some brands over the other. If you are someone who is used to one brand, you might have to make a compromise with your preferences. Lastly, some customers spend to redeem loyalty points, which is not really advisable.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
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:

Autumn 2018: Best Rewards Credit Cards for Thanksgiving Shopping

Autumn 2018: Best Rewards Credit Cards for Thanksgiving Shopping

Posted: November 8, 2018

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
The Best Credit Card for Earning Cash: Discover it® Cash Back

The Best Credit Card for Earning Cash: Discover it® Cash Back

Posted: November 2, 2018

You’ll have hundreds of dollars in your pocket in no time because you’ll earn money back on every purchase you make with this card. There are no restrictions on the amount of cash back you can get, and Discover even matches every penny you ... Continue reading
Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

Posted: October 10, 2018

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
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!