Understanding the relationship between bad credit history and reward cards

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Credit Card Applications » Research » Guides » Travel with Credit Cards » Understanding the relationship between bad credit history and reward cards

Understanding the relationship between bad credit history and reward cards


Updated: December 26, 2012

The content is accurate at the time of publication and is subject to change.
This content is not provided by Citi. Any opinions, analyses, reviews or recommendations expressed here are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by the Citi.

We all know how difficult things can get when credit history goes bad. An important mistake many people make is to blindly opt for whichever credit card they seem pre-approved for. It can be quite exciting getting mail saying pre-approved, but it is important to know that it merely means that the company is simply aware of your credit score and is sending you offer you might be eligible to apply for. Whether you can afford it or pay for it is a whole other decision altogether. Every single individual should above all else consider their credit to debit ratio and be sure that they can get a card with ease before applying for it. The sooner they clarify that, the better it is. It is quite easy to get a bad credit history; it is however more than difficult to maintain good scores and eligibility on your account

When you have decided to go in for a credit card you have to work out what you want to pay for. If you choose to simply spend on a card simply because it comes with attractive rewards you will be making a serious error in judgment. Most often reward cards come at a cost that is not so good - a high interest rate. Now with a high rate you cannot pay off what you owe every month with ease. Therefore it is important that people learn to work out their affordability and credibility when it comes to maintaining a good credit score to get their hands on a better card.

Another mistake most people tend to make is in opting for cards which come with gift coupons. Most often when they get close to acquiring a reward, they tend to spend over and above their usual set limit. This can result in some severe losses. For one thing the gift coupons may not be very flexible and you may be getting coupons for brands and purchases you do not like. Another thing is that they will have to be used within a said date and when it comes to travel or dining coupons it can be quite taxing to travel all the way just to redeem it. And often the cost of the reward may be much lesser than the amount you have ended up spending to earn it. This is also quite detrimental to your credit history and can cause bad credit history issues if you overspend.

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.
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