Would you like to know the most common traps or pitfalls linked with reward credit cards? If your answer to this question is yes, then we suggest that you read the remainder of this short article. Below we have listed down three reward credit card pitfalls that consumers like you need to avoid.
Three Reward Credit Card Pitfalls You Must Avoid
1. Reward programs that require you to spend a lot. Many card companies these days impose drastic changes in the fine print of the reward credit card programs they offer. They do not only cut the rebate rates of their consumers in half; they even come up with spending tiers that oblige cardholders to spend even more so that they can earn the credit card rewards they want. This is the reason why you need to be wary of the changes on your reward credit card program. If you believe that the new payment clauses, terms and conditions as well as rates imposed on your credit card account is not beneficial, then don’t hesitate to close the account immediately.
2. Rewards that require you to pay annual fees. There are also card issuers which look for ways through which they can impose annual fees on the reward credit card programs of consumers. How do they do this? They do so by simply offering new and exciting credit card rewards in the form of access to airport lounges, VIP suites in hotels and other luxurious perks.
Thus, consumers like you need to carefully consider the perks and incentives added to their reward credit card programs. If you think that you do not really need the exciting rewards offered by your card issuer, then resolve to steer clear from them.
3. Nuisances Fees. Card issuers are also looking for ways by which they can discourage inactivity among their loyal patrons. So, they try to come up with inactivity fees and penalties for cardholders who failed to use their cards within a period of three to six months. And that’s not all. Card companies are also planning to impose reinstatement charges to delinquent cardholders who failed to keep up with their monthly credit card charges. With these new nuisance fees, surely it will be very costly to handle a reward credit card account.
So, consumers should remember to read and understand carefully the details of their respective card programs. In so doing, they can steer clear from reward credit cards that require payments of exorbitant charges and nuisance fees.
Tips on Using Reward Credit Cards
Now, allow us to tackle with you five pointers that you can employ in applying for as well as in handling a reward credit card account in the most responsible way you can.
– Do not sign up for reward credit cards if you plan to carry balances from one month to the next. Always remember that accounts which offer credit card rewards usually impose high interest rates and fees.
– If you wish to continue enjoying the best credit card rewards, then resolve to maintain good credit standing.
– Set-up automatic payment arrangements with your bank. This way you can always keep up with your monthly credit obligations and you can avoid paying exorbitant penalties and late payment charges.
– Redeem your rewards as early as possible. If you won’t do this, your hard-earned points or miles will surely lose their value.
– Ask questions in case you encounter terms and payment clauses that you do not understand in your credit card program.