Credit Card Rewards – Disadvantages and Advantages


ADVERTISING DISCLOSURE: is an independent, advertising-supported web site. 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. has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Travel with Credit Cards » Credit Card Rewards – Disadvantages and Advantages

Credit Card Rewards – Disadvantages and Advantages

Updated: December 26, 2012

The content is accurate at the time of publication and is subject to change.
There is an intense competition in the markets for customers and credit card companies are trying everything that they possibly can to gain more customers. However, the rush is not for those who do not have a credit history or have a massive outstanding balance to their name. The competition is for those customers who have a very good credit history. For this reason, credit card companies are offering numerous offers in order to entice the creditworthy customer to use their cards. The major benefit of the rewards that come with a credit card is of course the underlying savings that a customer can make. If there is a cash back offer, of say 5% on a purchase, it means the customer automatically saves 5% as discount. Add to it the fact that customers get discounts up to 20% on select purchases with merchants who have tie-ups with the credit card companies. On a purchase of a thousand dollars, a customer can save more than fifty to hundred dollars which is quite good. More and more credit card companies are also offering airline miles to customers who can then redeem them for a trip once in a year. There are other credit card companies, who have gone one step ahead. They offer customers double cash back and twice the number of air miles for all purchases on weekends. Given that most working people do their shopping on weekends it suits quite well for them and they make quite a lot of saving. Some of the lesser known benefits of premier credit cards include 0% APR for the initial period, less regular interest rate, no annual fee and processing fee waived off as well. Although, a premier credit card looks a prospective deal with all the rewards, one should keep at the back of the mind that credit card companies are out there to make a profit. There are indeed some disadvantages of the premier credit cards. Although credit cards are required for a good credit history, one can get carried away with their shopping due to the discounts. This leads them to not be able to make payments on time leading to heavy penalty in the form of high interest. Secondly, the discounts drive customers to merchants they normally wouldn't visit. This means they prefer brands which they don't usually go for due to the discounts and spend there too. This is because some of the discounts apply only if you buy a certain amount of goods. There is a cash back offer which leads one to buy more and buy often. However, most people fail to check the fact that cash backs always have a maximum limit per month as well as per year which turns out to be less than what one would have calculated at the back of his mind. Another important problem with the credit cards is the fact that no annual fee only means it has been waived off for the first year, most of the times, due to which the customer starts incurring an annual fee of fifty odd dollars from the second year onwards.

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.

Related Research:

{{PRD_NAME(1314)}} - A World Elite Mastercard Travel Credit Card

Citi Premier® Card - A World Elite Mastercard Travel Credit Card

Posted: February 10, 2021

Citi, a advertising partner, offers the Citi Premier® Card, which gives elevated ThankYou points for your travel expenses and, with the recent update of the rewards program, for purchases at restaurants, supermarkets, and… Continue reading

Credit Cards Can Be Rewarding This Holiday Shopping Season

Posted: February 04, 2012

There`s no doubt about it – holiday shopping can be a truly stressful endeavor. Not only are there often crowds and chaos to be encountered at stores, but there is the challenge of finding gifts for everyone on your list while staying… Continue reading


Discover it® Student Cash Back

Posted: August 14, 2014

It often appears to be hard for students to find an advantageous credit card offer. But things are not that bad since the Discover it® Student Cash Back credit card has come out. The card comes with a 0% (6 months)… 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!