Determining the “best” perks and rewards program is actually a very tricky endeavor. The problem mainly is that credit card companies like to make it more complicated so that you don’t really understand what you’re getting into. Often, credit card companies may change some details about the rewards, or they may even discontinue a particular reward after a period of time. Then there is also the fact that a reward that means a great deal to some may not be all that rewarding for you.
All you know for sure is that you’re getting something, and surely that is better than nothing, right? Well, not really.
Are Rewards Programs Actually Beneficial to You?
First of all—and this is crucial information—don’t look at the rewards program first. Rewards programs are come-ons that credit card companies use to attract customers, but as a customer this shouldn’t be the first thing you consider.
The first thing you need to look at is the APR, if you tend to carry a balance. You should take a look at the introductory APR, and then the standard APR.
If you tend to carry a balance, then you need to first look at the non-rewards programs credit cards because the APR in this cards is usually lower. With rewards credit cards, the extra you pay in interest payments will absolutely be greater than the benefits of the rewards. It will cost you money, and it will also waste your time and give you headaches.
So again, remember this rule: Do not carry a balance. When you can follow this rule every time, then that’s the time when you can look at perks and rewards programs.
Types of Rewards
Since you don’t plan on carrying a balance then the APR becomes irrelevant. This means you can look at the rewards program attached to the credit card. Again, this can be complicated, but there’s one basic guideline here which can help you. The reward should match your preferences and your lifestyle.
So now let’s look at the most common types of rewards:
This becomes more complicated when cash back bonuses differ according to the category of the purchase (gas, groceries, etc.). And this becomes a lot more complicated when the rates rotate at any given time. Then you have to look at the limits on the purchases as well. Generally, though, the higher the limit, the better it is for you.