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Who should use: are rewards credit cards for everyone?

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Rewards credit cards are widely popular among people. Almost every credit card issuer offers their own rewards program that can benefit the consumers as well as the issuers. People are switching their credits cards into rewards credit cards, just because they accompany a huge assortment of benefits and perks. But, the main question is who should use rewards credit cards? Or, how can rewards credit cards be advantageous for some and disadvantageous for some? The answer to such questions lies in the spending habits and preferences of different people. It depends on expenses, which can vary from person to person.

Who should use rewards credit cards?

Rewards credit cards are known for their different benefits. Some offer a huge sign up bonus or extra reward points, and some offer airline miles, cash back facility, special discounts, loyalty points, etc. Among so many offers, you need to decide which one is the best for you. Think about the main purpose behind using the card. For instance, if you travel a lot, then a rewards credit card that offers bonus airline mines, discount on hotel stays, and complimentary access to airport lounges, with no foreign exchange fee will be the best for you. Such as the Starwood Amex card, which offers free hotel stays and free air fare. If most of your monthly expenses are spent on groceries, then a card that offers discounts on groceries would be suitable for you. And, if you love shopping, then you should opt for a rewards credit card that offers discounts on popular merchandise stores and brands.

 

The question of who should use a reward credit card also depends on people who want to save. If you want to save for a particular purpose like for retirement or college savings, then you can go for a card that offers the same facilities. Such cards offer cash back that is directly deposited in your retirement or savings account. If you have a huge business, you can go for a rewards credit card that lets you maximize your business profits by offering reward points on business payments. If you love eating out, then a card that offers points on dining out will be good for you. Or else, if you just want to show off your elite status, then there are cards that offer the same.

 

On the flip side, rewards credit cards are not only about extra perks and benefits. They come with several charges, including annual fees, interest rates, etc. As the name suggests, annual fee is an amount that you have to pay in a calendar year to avail the benefits of the card. Interest rates are charged when the cardholder does not pay the entire amount at the end of every month. Moreover, the reward points or miles come with an expiry date. And, if you don’t redeem the points within a period of time, then they become nil and are of no use. In addition, there is a minimum amount of money that you must spend, in order to avail the rewards of your card.

 

Thus, who should use a rewards credit card depends on your individual preferences and expenses. Look for a card that fulfills your requirements in the best way possible. To avoid interest charges, pay the balance in full or set an automatic debit from your account. People, who have an excellent credit score, who make their payments on time, and who can accomplish the spending requirements of the card, can go for rewards credit cards.

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