What could be better than a credit card that rewards you for using it? Credit card rewards programs can offer lots of exciting perks, including cash back, gift cards and travel. But every reward costs something, and you should make sure you understand the trade-offs to ensure you find the credit card that fits you best.
Simply put, the more you spend with your rewards card, the more rewards you earn. The key is to find the best credit card rewards program for your needs. You may be tempted by that great rewards card your buddy just got, but make sure it's suited to your lifestyle before you apply. For example, if you don't drive much, a card that offers gas rewards as its main perk won't make sense for you. There are many different types of programs available. Look for one that makes it easy to earn something you'll really enjoy.
Many programs allow you to earn one or more points for every dollar you spend in purchases. Some only let you earn points for certain items like gas, groceries or shopping at certain stores. There are also airline programs that let you earn miles for purchases. Some cards offer just a single type of reward, while others offer you a choice of many different options. Reward types include:
Before you apply for a rewards credit card, ask yourself these questions:
Remember: The more you buy with a rewards credit card, the more you earn—but running up a big balance just for rewards may not be your best option. It’s okay to use your card frequently, but make sure to spend only what you can afford to pay back. If you choose and use your card wisely, you may be in for a rewarding experience.