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Research: Numbers you should be careful about when looking at credit card rewards -

credit card rewards are promoted as programs to reward the customer for spending on a credit card and also being consistent with their payments. These rewards are the benefits awarded by the credit card issuers to the cardholders for their excellent creditworthiness. However, in recent times, there is a whole new market dynamic that is coming into shape. Customers are being offered rewards as a strategy to induce them into greater spending as well. This is done through loyalty points, bonus miles, cash backs and discounts. It takes an intelligent customer to distinguish the good credit card rewards from the worthless ones and get the calculations spot on.

Cash back percentage

It is not uncommon to find credit cards that promote cash back offers by promising a discount up to a certain limit. This is where cardholders need to refer to the fine print to leave out ambiguity. As it turns out, most credit card cash back offers are promoted as up to 5%, but in effect, this 5% would be only at select gas stations or drug stores. For the rest of the purchases it would be the normal purchase of about 1%. So, it is a bad idea to go by promotions and you must get down to the last detail before taking the credit cards.


Credit card discounts are by far the most misleading offer you can come across in the modern day markets. A good example would be credit cards which promote discounts of up to 20% on all purchases on a particular brand. Individuals who are loyal to that brand, feel this would be a good offer. A good look at the fine print will reveal that the discount is only valid under certain conditions. This includes purchase limits where customers have to buy for a minimum amount before this discount can be availed. This might not always prove useful, and if you chose this card over another card with lower APR but no rewards, you might have made a mistake.

Frequent flyer and frequent shopper programs

Frequent flyer reward programs are very popular amongst credit card customers. Most cardholders think they will be able to get a good discount on their airline tickets. However, you need to pay closer attention to the exact terms. You might not always be allowed to redeem your points to get the discount, and you will have to reach a specific number of points before you can start redeeming. The expiry date is also something to be aware of in order to cash in on the reward program. Many airlines will not let you redeem these points for a partner, which could prove to be quite an inconvenience. Lastly, you will have to face the frustration of many blackout dates before you can get your discount. Even for a frequent shopper, the discounts could be on select brands at select merchants, which can end up being worthless for you.