When signing up for a credit card, it’s difficult to decide on the type of card that you should choose. If you have the discipline to pay off your balance and use your credit card wisely, you want to get some benefits beyond just being able to swipe the card.
On one hand, it’s tempting to go for the cash back credit card since you can a percentage of your money back. On the other hand, you may want to get a points-based card if you travel often or plan on taking advantage of the points in other ways.
How do you compare credit card reward programs? Here are some of the questions to ask yourself before applying for your next credit card:
How do you use your credit card?
Before you decide on which credit card reward programs to go after, think about how you use your credit card. If you travel often, a points reward system might benefit you because you can upgrade your travel, get free flights, and even earn free hotel stays. Those kinds of rewards will help you more than a few dollars back. How you use your credit card will help you compare different offers.
How can you earn cash back with the credit card?
Cash back sounds great in theory, but you might be surprised at the restrictions you run into. Are there certain categories where you can earn cash back? Is it cash back on everything?
You have to read the fine print because you never know what the limits will be. For example, some credit cards have a limit on how much cash back you can earn or on where you can earn cash back.
If you do the grocery shopping for your family and take care of all of the bills, cash back will benefit you since you’ll enjoy getting some money back when all of your expenses are accounted for.
How easy are the rewards to redeem?
The one thing that’s important to me is the ease in which you can redeem the actual rewards from the credit card.
As you compare credit card reward programs, it’s important to consider the realities of redemption. Is there a tedious process? Is it relatively easy to use your points?
You don’t want to be stuck with thousands of points that you can’t use because the system for redeeming them is complicated. Some of my friends swear by points. They take advantage of the various bonuses that are offered and do very well.
That’s how can you can compare credit card reward programs. You have enough to ponder to help you decide which credit card to apply for. You can also try out multiple credit cards to see what works for you.