The unrewarding truth behind reward credit cards

ADVERTISING DISCLOSURE

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

Credit Card Applications » Research » Guides » Travel with Credit Cards » The unrewarding truth behind reward credit cards

The unrewarding truth behind reward credit cards


Updated: December 26, 2012

The content is accurate at the time of publication and is subject to change.
An increasing number of consumers today are applying for rewards credit cards without realizing the underlying truth behind them. Though the concept of earning rewards each time you use the card seems to be appealing, the truth seems to be far from it. Card holders do earn points, but at what price? Every person who plans to apply for the rewards credit cards should know how they work and what to expect from it before signing on the dotted line. Will you use the rewards? Do not sign up for rewards cards only because you feel that the offer being given to you is too hard to resist. Remember the fact that promotional offers are valid only for a certain period post which the actual APR, fees and other charges come into play. Also, before applying for the card, sit back and think if you will be using the rewards on the card. If you are not a frequent flier, applying for the air miles card is not the right thing to do. You will only pay high fees without making use of the rewards. Instead, opting for cards that offer you discounts at major retail outlets and restaurants locally may work in your favor. Redeeming your rewards A harsh truth associated with rewards credit cards is that redeeming the points you earn is not as simple as you presume it to be. There are a lot of terms and conditions that govern each card in terms of claiming the gifts. Most of the time, the number of points you have to accumulate is set high. This implies that you will have to spend a lot of money using the card before you are eligible for redeeming your rewards. In the process, you will end up spending more money from your pocket as compared to the value of the reward. The interest rates and fees One cannot deny the fact that rewards credit cards come at a price. The Annual Percentage Rates of these cards are way higher as compared to most of their counterparts that do not carry rewards. The annual fees for these cards are also significantly higher, thus making them heavy on your pocket. These cards are highly risky since they can cause large debts if not used wisely. The promotional offers on these cards mostly run for a period of six months only, after which the regular APR and rates come into play. This is when reality hits the customers and by the time realization dawns, most of them would have incurred debts that they will have to struggle to pay off. Rewards credit cards are only for consumers who have the means to pay off the huge bills that come with them. People who cannot afford to repay the complete outstanding balance on a month on month basis should not even consider applying for them. Instead, look out for other interesting cards that offer good APR and rates, but not rewards, as they are more affordable and less risky.

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.

Other Travel with Credit Cards Research:

Related Research:

Top 5 Cards for Travel from Our Partners: Summer 2018 – Expert’s Choice

Top 5 Cards for Travel from Our Partners: Summer 2018 – Expert’s Choice

Posted: February 12, 2018

The sun shines more and more each day, flowers are in bloom and you already feel how hot it is getting - summer is here. Summer holidays are almost here, and you are in need of dire preparation. You can lift in spirits and let CreditLand ... Continue reading
Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Posted: February 10, 2018

If you're trying to find the perfect rewards credit card, you might feel like you're drowning in options. There are just so many out there, and many of them look similar. This can make it tough to decide on a card. One thing people often ... Continue reading
Price Protection: Credit Cards That Will Refund a Price Drop

Price Protection: Credit Cards That Will Refund a Price Drop

Posted: February 8, 2018

Those who often find themselves buying stuff and then discovering that they could pay less for the same item they've just bought, will appreciate this credit card benefit – price protection. This is the least known and the most neglected ... 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!