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Research: Features that undermine credit card rewards -

A lot of us are crazy about credit card rewards and are constantly looking for the best reward credit cards. There are several types of credit card rewards on offer. These include cash back reward cards, credit cards which offer discounts at supermarkets or select merchant stores and credit cards that give you loyalty points for all your purchases that can later be redeemed in one way or the other. However, not all reward credit cards are as useful as they seem to be. In fact, some rewards might not really be of much use at all. Here are some things that undermine the value of credit card rewards. You should look for these in the fine print of the credit card to make sure you understand what you can expect.

Expiration dates

A lot of reward credit cards come with a range of terms and conditions. One of them is an early expiration date of the reward. In other words, even if you have loyalty points or discounts to cash on, you don’t have much time to actually do so. That means you cannot wait for a long enough time to make proper use of the rewards. Instead you have to either buy something that you don’t need immediately or let go of the rewards completely, both situations that undermine the actual reward.

Caps on the rewards

This is once again something that is usually mentioned in the fine print of the credit card. If there are caps on the rewards it means that you cannot use those rewards to your benefits as much as you thought it was possible. For example, you may have accumulated about 2000 loyalty points on your credit card. But there could be caps which allow you to redeem just 50 points in a month or 500 points at the most in a year. In those cases, your other points are wasted entirely or they expire. Such caps do not really allow you to take full toll of the rewards and have been intelligently devised by the credit card companies to save their costs.

Milestone expenses

You might be excited about a 25% discount on your purchase you make at a particular mall. However, invariably this comes with a caveat that says you need to purchase goods at least worth $200 if you need to avail that discount. Such rewards which are triggered only by milestone expenses make you spend more money without actually planning for the same in order to get the benefit of the rewards. In the end you might fall trap to a marketing strategy from the card companies.

Frequent flyer issues

A lot of cards promise you discounts on airline tickets in return for your loyalty points. However, it might be really tough for you to actually get those discounts. To start with, there are blackout dates, on which your discounts wouldn’t work. There would be other terms and conditions like a tab on the minimum ticket price which will allow you to get the discount.