Tips for Choosing a Rewards Credit Card

The next time you are looking to get a new credit card, look into the segment of credit cards on the market that reward you for making purchases. After all, doesn't it make sense to get some money back after spending a long day shopping? When choosing one of these rewards cards you can't just rely on the rankings or the recommendations of your friends. Instead, you need to do some research to determine which rewards credit cards are best for your personal spending habits.

Frequent Flyer Rewards
If you are going to apply for a frequent flyer credit card, look for one that meets your travel pattern. If you travel for work and travel frequently, this may be a good card to get. That will allow you to redeem rewards for personal travel outside of the office. Ask your employer if you can use your card to book your travel, and then be reimbursed by the office. This will allow you to maximize your points, as you will get the points for the flight, and then earn points on other purchases such as meals and supplies while out of town. When comparing frequent flyer credit cards, divide the number of points needed to redeem for a ticket into the average cost of your ticket. That will help you determine which card has the most value by choosing the one with the points having the highest point-to-dollar value. Other perks to compare are cards that offer you a large amount of bonus points or a free flight after your first purchase of a specific dollar value.

Points For Awards
Another common marketing approach for reward credit cards is to award points for every purchase you make, and then to allow you to redeem those points for prizes. The prizes can range from gift cards to travel vouchers. Compare the features these cards offer. Some will offer bonus points for purchasing certain types of products. Only choose that card if you purchase those products regularly. Others might offer special bonuses announced through email, such as double points for purchases made on specific days. If several cards offer similar prices for points, you must compare them not only on the amount of points needed to redeem, but how those points are earned. Some cards may reward more points per dollar than other cards.

Rebate Rewards Credit Cards
Rebate reward credit cards offer you a percentage of your purchases back at the end of a specific time period. Some credit cards pay out this percentage monthly, others quarterly, and others annually. Compare the payout frequency as well as the percentage that you get back on purchases. Compare cards that offer higher refund percentages for certain categories of purchases. As an example, some cards may offer a higher refund percentage for gas purchases or airline ticket purchases. Choose the card that offers the best refund for the items you purchase most frequently.

Choose Wisely, Don't Be Misled By Dollar Signs
When choosing a rewards credit card, think before you apply. Determine if you can afford to have another credit card that might increase your debt if you can't pay it off each month. Compare the value of the rewards and refunds as well. A card that offers a better reward or rebate redemption program may also charge a much higher interest percentage than its competition. If you are not going to pay off your balance each month, compare the extra costs you will pay in the higher interest percentage to the more lucrative rewards. Those rewards may be luring you into accepting a card with an extremely high interest rate, and may not be your best option.