Things To Beware Of In Credit Card Cash Reward Program Offers

When you see offers for credit cards that come with cash rewards, the offers may look very tempting. And some cash reward programs are, indeed, very good. But not all are as good as they appear to be at first glance.

Some advertisements for cash-back cards will offer you what are known as tiered rates. For example, in big print, the ad may say that you will get "up to" a certain percentage in cash back. But in the fine print, some companies reveal that they pay a much smaller percentage on, say, the first $1,000 that you charge in a year, and then a slightly larger percentage on the next $1,000, and so on. You may have to charge many thousands of dollars before you reach the rate that was displayed in the big bright print.

Another trick that credit card companies may use is to advertise that you can double your reward by getting a gift certificate instead of cash. It's only when you look at their list of gift cards that you may realize out that only the least popular gift cards are offered at the full advertised double-your-reward rate.

Another common trick is to offer an introductory cash-back rate that becomes much lower after a certain period of time, often around three months.

One credit card company tactic that's impossible to protect yourself again, no matter how diligently you may pore over the fine print, is when the company simply decides to change its mind. Perhaps one company bought out another, or perhaps the company is doing some belt-tightening and has decided that its previous rewards programs were too generous. They do have the right to just cut the benefits whenever they happen to feel like it.

Most important of all, if you are someone who doesn't pay off your entire balance every month, make sure that you're not paying a lot in extra interest (and/or fees) in order to gain a little bit in cash back rewards.

Cash rewards programs can be a very good thing. If you're not paying any interest on your credit card, and if having a cash rewards card doesn't tempt you to spend more than you otherwise would, then getting a cash reward is like getting free money. Just remember that the credit card companies like to play games with their offers, so be a good player yourself by paying close attention to what they are doing. They don't expect many people to read the fine print, so if you do, that will give you an edge that will help you beat them at their own game.