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Credit card reward programs are used by credit card companies to lure customers into applying for these cards and also to tempt them into spending more. However, credit card rewards are not always as rewarding as they seem to credit card customers. Credit card issuers put a lot of limits on these reward programs which in a way undermines the benefits of these reward programs.

Annual limits

A credit card might be promoted for loyalty points that can be redeemed for cash. However, on the fine print credit card companies might end up mentioning that in a given year, you could only redeem a stipulated amount of points and not more even if you have collected a lot of reward points.

Monthly limits

Apart from annual limits, card issuers might also put limits on a monthly basis on how many points you could redeem. Although there is no limit on the points you can collect, you need to know you cannot redeem them even if you have a lot of them.

Select merchants and merchandise

Sometimes the reward programs might be totally useless. Credit card issuers might allow you to redeem your loyalty points in the form of discounts on select merchandise, which you may not even need or want to spend on. Similarly, the points could be redeemable only at select merchants, which you may not prefer or where the items are highly overpriced.

Discounts that can be availed after select purchases

There are some reward programs, which instead of benefiting you will actually end up making you spend a lot more. This means that the reward points can be availed in the form of discounts e.g. only if you have purchases merchandise worth a fixed amount. This means, if you don't purchase anything you lose your reward points and if you want to use them, you have to spend more money.

Expiry

Strict expiration dates are set on redeeming your reward points. Sometimes they expire every month or couple of months. It might not always be possible to redeem every month and if you cannot keep these points to redeem when you want to, they are not really beneficial.

Overall Cap

Irrespective of how many points you have collected, there might be a limit to how many you can redeem or get your cash back for. So although the card is promoted as 5% cash back, the terms might have a cap at 50 dollars per month for example.