The content is accurate at the time of publication and is subject to change.

Research: Credit card rewards and what your should be careful about -

Credit card rewards are often part of a strategy by the credit card issuers who are looking to draw more customers to use their card and also spend more on it. Credit card rewards are not always a token of appreciation for the credit card holders. In many ways they could be disguised tricks to enhance revenues of the credit card issuers. Here are some common rewards and things which credit card holders need to be careful about in that regards.

Cash back offers

These are the most popular of credit card rewards and offer at least 1% saving for the customers based on their expenses. In fact a lot of customers give up using other credit cards to benefit from cash back offers on one of their credit cards. However, customers need to ensure that there isn`t any annual fees on these cards as an annual fee of 75 - 150 dollars could eat substantially into the savings. Card holders should also check what the cap on redeeming cash back is. Many credit cards allow cash back only up to a certain stipulated amount per month and per year.

Frequent flyer airline rewards

Those excited about their airline miles should ensure that there is no fine print involved. A lot of airlines do not let redemption of points in the form of discounts on airline tickets at will. There are blackout dates more often than not. Also customers find it hard to get tickets when they want to redeem the discounts. Airline miles reward credit cards are notorious for their high annual fee. Also ensure there is no transaction charge or hidden fee while redeeming the airline miles.

Opening bonus

To cash in on the holiday season a lot of credit card issuers have announced an opening bonus in the form of points or cash for customers who open new credit card accounts. However, the bonus doesn`t come without any caveats. Most cards offer a bonus of about 100 dollars only if the cardholder manages to spend a substantial amount in the first 3 months. Often this offer pushes card holders to spend more than what they actually do in order to avail the opening bonus. When there are joining points instead of cash, one has to know exactly how these points can be redeemed.

Frequent Shopper rewards

These are one of the trickiest reward cards around. If there are discounts, they are usually available only after you reach milestone expenses. The other disadvantage is that the discounts can be redeemed only at certain merchant stores, which might not be your preferences.

Therefore card holders are better off spending based on their budget, and not based on the rewards on the credit cards.