By Tisha Kulak
This is a guest post by Tisha Kulak. Tisha is a writer for CreditorWeb.com, where she writes about secured credit cards, rewards programs and personal finance.
While many people may opt for a rewards program credit card, many others do not even know their current card may also have rewards benefits. Cardholders who aren’t fully aware of all of the benefits their credit card offers certainly can be missing out on some money saving opportunities.
There is a large variety of rewards programs available to consumers today. Choosing a card can be overwhelming, especially when it comes to the programs benefits. A good place to start is by considering your lifestyle.
For instance, if you travel frequently for business or pleasure, a card that offers frequent flier bonus rewards would be something to strongly consider. If you commute to work or find yourself filling up at the gas pump often, a gas rewards card might be the most beneficial to your financial situation.
Cold-Hard Cash is Nice
Some rewards cards deal with cash rebates. Typically, for every purchase on your card, you will, in return, get a percentage of your spent cash back. Many times companies will offer you a choice for receiving your cash back benefits. You can request a check for the amount of cash you have earned back, you can purchase items especially selected for the promotion. Or you can have the cash bonus amount placed back onto your account, thereby reducing your debt.
Get Some Perspective on Your Credit Card
The ways you earn rewards points will vary by program but in order to maintain good financial practices, it is essential that you think of a credit card more like you would a debit card – meaning you should never charge more on the card than you can afford to pay back each month. You should never spend more in purchases just to reap a larger percentage of rewards. The inflation of your interest percentage will wipe out any rewards you receive.
Skip the Hoopla
When selecting a rewards card, it is more important to analyze the facts of the card more than it is important to focus on the bells and whistles of the rewards program. Avoid cards with annual fees and high interest rates, regardless of what the reward program offers. Pay close attention to the remaining interest rate after any special introductory offers expire. While you may start out with a 0% rate in the beginning, you may end up with an 14% rate sooner than you anticipate.
Utilizing a rewards card to benefit your life can be an important financial step. However, it is most important to remember that using any credit card responsibly is a financial obligation.