What are the best credit card rewards? Well that depends on a lot of factors, as well as your own personal lifestyle.
It’s important to understand, of course, that credit card companies offer rewards so that you’ll be encouraged to use their cards for spending. On average, the interest they get back far exceeds the value of the rewards themselves. But by knowing where the pitfalls are, you’ll be able to choose the best option for you.
For example, are you being tempted by 0% APR credit cards balance transfers away from your existing account? That can be a great deal for some people, and if there are other rewards added on, it can seem like a no-brainer. Before you jump ship, ask if the introductory rate applies to new purchases too, because otherwise they may use any repayments you make against the old balance first, while new purchases are racking up interest at a higher rate.
As always with credit cards, read the small print. Do your purchases give you rewards, like cash back, right from the start, or do you have to clear your old balance first? Is there a straightforward cash back system (say, 3% of your total purchases), or do they use a ‘points’ system that you can’t quite understand? Are there limits to the rewards offered, like airline tickets that have blackout dates, or do they really meet your expectations in full? Some limitations are quite clear, like a credit card that offers great rewards, but only against certain purchases. This is quite common when credit card providers partner with other businesses to their joint benefit.
The best credit card rewards, therefore, are the ones you clearly understand. Don’t be afraid to question everything before deciding on a reward card, and if you truly want to make the very best of them, make sure you can pay off the balance in full every month.