There is no doubt, reward credit cards come with plenty of perks. Used responsibly, reward credit cards can save you money and help you meet your budget goals. Reward credit cards also come with enhanced buyer protection benefits. Here are the top six perks of using reward credit cards.
1. Sign-up Bonuses
Many reward credit cards offer tens of thousands of free points just for signing up with the carrier. On average, you could find yourself the beneficiary of 75,000 sign-up bonus points, which would be enough to book an airline ticket. You need to charge a certain amount of money to the card within the initial months of getting it to qualify for the sign-up points.
2. Cashback Rewards
This does not mean you will see cash in your hand, but when you make purchases using your rewards card, you get cash back in the form of credit on your account. Most rewards cards offer at least two points for every dollar charged, depending on where you use it. Some offer as much as 5% on eligible purchases.
You can also arrange for your cashback rewards to be deposited to your bank account or to purchase gift cards from your favorite retailers.
3. Reward Points
Reward points perks mean that for every dollar you spend you earn one point. Each card issuer has a different policy, so you need to carefully check the rules. You can redeem reward points for cash, travel, or gift cards.
4. Travel Rewards
If you choose a travel rewards credit card, you earn miles or points every time you use your card. There are credit cards associated with certain frequent flyer programs that offer miles toward free travel. Both programs are essentially the same. The sign-up bonuses can be very lucrative. Certain spending categories earn you more travel points. For instance, some rewards cards grant travel reward points only when you use the card at certain hotels or with select airlines. Others give points for any travel-related spending.
5. Travel Insurance
Reward credit cards come with travel insurance that covers any costs you incur due to medical issues, property damage, or lost luggage. This is better than the coverage you would have by using a regular credit card.
6. Buyer Protection
How many times have you made a purchase only to find out that you could have purchased the same item at a different store for less? You can try returning to the original retailer with a copy of the price tag or barcode, but it is not easy to succeed. One of the perks of using reward credit cards is the purchase protection program. Getting the better price is much easier.
Factors to Consider Before Signing Up for a Reward Credit Card
Before signing up, you might want to ask yourself a few questions, such as
- Is the cashback deal better than paying for the items with cash?
- Will you be able to pay off the charges in full every month?
- Is there an annual fee?
- Which reward credit card aligns with your interests? For instance, if you do not love to travel, then a travel rewards card is not going to be such a perk. On the other hand, if you are working on trimming your expenses, a reward card that offers cash-back when you fill up your gas tank or shop at your favorite supermarket might be a good choice.
The perks of using reward credit cards are only helpful if you use the cards strategically and maximize the rewards. At the same time, keep your budget in mind, be careful not overspend or go into debt. Pay the balance in full so that your APR does not negate your perks.
If you are burdened with high amounts of credit card debt and are struggling to make your payments, or you’re just not seeing your balances go down, call Timberline Financial today for a free financial analysis.
Our team of highly skilled professionals will evaluate your current situation to see if you may qualify for one of our debt relief programs. You don’t have to struggle with high-interest credit card debt any longer.