How to Choose a Rewards Credit Card

There are several different things to consider when choosing a rewards credit card. There is no one reward card that is best for everybody. The best reward credit card for you depends on several factors that are unique to you.

One thing you will want to do when choosing a rewards credit card is to look at your personal shopping habits. The amount you spend each month as well as what you spend your money on each month both help determine which reward credit card will provide you with the best rewards. Some cards require you to spend a minimum amount before you earn any rewards or pay only a small percentage back until you reach a minimum spending threshold. If you are not a big spender than these aren't the cards for you.

Another thing to consider is how the credit card awards the rewards you earn. For instance if you never fly then you probably do not want an airline rewards credit card that rewards you with airline miles that you can use to purchase a plane ticket in return for using your card. Conversely if you fly frequently than you probably will want an airline rewards credit card because earning free airline miles is the best reward for you.

In addition to airline rewards the most popular reward credit cards offer their rewards in the form of cash or points. If you choose a card that offers points check carefully to see how they are awarded and for what products they can be redeemed. It is typical for credit card companies to have their own shopping site where you can redeem your points for products or gift cards. If the shopping site doesn't have any products that interest you or only has gift cards for places you do not do business at then it isn't a good deal for you. In addition compare what the points are equivalent to in dollars. That way you can tell if you are getting a better deal than just getting cash.

My personal preference is to use a card that awards cash back. You can always use cash. The cash back percentage is usually as good or better than the percentage you would earn for being awarded in points. It is also easy to determine your rewards. If you spend $100 on a 1% cashback card than you will get $1 back. That is much simpler than being awarded points and then having to determine how many points you have to exchange for a $100 product.

There are some pitfalls to look out for. One is the length of time you have to redeem your rewards. You don't want your rewards to expire before you have a chance to use them. You also want to avoid annual fees unless the card offers an exceptional value. Also look out for a cap on the amount of rewards you can earn. Of course you don't want to carry a balance or the interest you pay will easily negate any rewards you earn.

There are many things to be aware of when choosing a rewards credit card but if you choose wisely you can be handsomely rewarded for using your rewards credit card.