Introduction
Having a credit card can have its perks, as well. One of these perks is to earn credit card rewards. Driven by the need to win more clients over to their side, banks, financial institutions and companies issuing credit cards come up with loyalty programs to expand their client base.
These credit card rewards program are optional inviting cardholders to sign up and earn points in exchange for perks, benefits, and rewards. Free travel vouchers, tickets, hotel stays, discounts in restaurants, and retail stores are examples of the types of credit card rewards you can earn. There are also cash-back programs where you get money back or credits on qualified purchases.
Step 1
Shop around for credit card rewards programs before you apply for a credit card. There are many types of credit card rewards program and it is important that you check the conditions and implications of the promotions before signing anything. Most will offer 0 percent participation in the first year. However, after this period, you have to pay an annual fee for having the credit card. Look at APR, interest rates, setting-up fees, maintenance fees, transactions fee, and penalty fees.
Step 2
When things are not clear to you, get a professional advise from a credit card specialist or ask friends and families who are using the credit card rewards programs. Take note of hidden costs such as annual payment rate (APR), minimum interest charge, and penalty APR.
Step 3
Arrange a meeting with the credit card issuing company. It never hurts to ask questions, so if there are provisions in your contract with the company that are not clear, do not be afraid to speak out.
Step 4
Take note that when you are signing up for a new card, your credit history will also be checked. There are companies which have enticing offers for credit card rewards, but the costs of joining are also difficult. Often, an excellent credit record is a prerequisite. If you don't have a better than average track record, you will be turned down for these offers. An example is the American Express Premier Rewards Gold Card which requires an excellent credit rating.
In addition, although there are zero fees to join the first year, there is a fee that you need to pay in the succeeding years. Unless you are spending a lot and put these expenses on your credit cards, you might have to rethink about joining this credit card rewards program.
Step 5
Those who have credit cards already should check whether the issuing company has a credit card rewards program. Since participation to the credit card rewards program is optional, make sure that you sign up for your company's loyalty program. Perks include earning points for every dollar that you spend and once you have accumulated enough points, you are eligible to exchange them for air tickets, meal and shopping vouchers. Other companies have also cash back programs. The terms and conditions in each company differ from qualifying purchases and redemption options to minimum point requirements and time validity of points.
Tips
Although having a credit card facilitates transactions, it also comes with obligations. Make sure that you pay your full balances each month to avoid penalties. Like any type of credit, do not borrow more than you can afford to pay back, even if those credit card rewards seem attractive. The longer you put off paying credit card charges, the larger the interests become making them more difficult to completely pay off.
