Depending on your spending habits, these accounts can be extremely beneficial, but
it's important for you to weigh a number of options before you commit to this or
any other kind of credit card account.(You can use our
Credit Card Search Engine to narrow down your choices.)
1. Is there an introductory offer?
These days, many rewards credit cards come with a number of different introductory
offers, and many can be extremely beneficial. However, the one that works best for
you will, perhaps not surprisingly, depends upon your needs.
low interest credit cards carry low interest rates for purchases in the
first 12 months or even 18 months the account is open, meaning that anything you
buy during that time will essentially cost you nothing more than the price, and
you will still earn points.
Others might carry offers of several thousand bonus points or more just for signing
up, and then double that total if you meet certain spending thresholds within the
first few months you have the account. Often, the value of these bonus credit card
offers can be as much as a few hundred dollars' worth of points.
2. How many points can you earn for your everyday spending?
To figure out just how "worth it" a points credit card may be for you, you will
need to look at your previous spending habits. That's because in many cases the
interest rates on these accounts are likely higher than you are used to paying for
carrying a balance from one month to the next, and there are usually annual fees
For this reason, the points you might be able to earn on your new account might
be wiped out unless you spend enough to cover the often-sizable annual fee, or if
you tend to carry a balance over from one month to the next.
When looking into your spending habits, you might want to look at the existing credit
card interest rates you pay, and how much they end up costing you every year, to
determine whether these accounts will be worth it.
3. Are there any restrictions?
In some cases, a rewards credit card that gives you points for every dollar you
spend will have some restrictions on how they can be earned or redeemed. For instance,
some might only reward you up to a certain point every month or quarter, meaning
that if you tend to put a lot of your purchases on your card, you might exceed that
Others might have limitations on the amount of time you can sit on your points without
redeeming them by imposing expiration dates, which might not help you reach the
redemption goals you had in mind when you opened the account.
4. What is the value?
With all the above in mind, you might also want to do some research into the dollar
value of the points you can earn for every purchase. Some might be more
effective than others in helping you rack up rewards, and those with the highest
dollar value per point will be the most beneficial.
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