Throughout the history of credit cards, lenders have come up with some interesting perks for consumers as a result of industry competition. The evolution of credit cards has led to a seemingly new industry in itself surrounding rewards credit cards. Using these cards, consumers will earn points for every purchase they make. Once the points have built up to a high enough number, you can redeem those points for great rewards.
Because rewards credit cards are so popular, there is no shortage of offers to choose from. You’ll find offers that provide travel rewards, gas rewards, cash back rewards, gift cards, and much more. Each different option is going to come with it’s own unique pros and cons. So, it’s important to take your time to compare and figure out exactly what works for you.
What To Compare with Reward Credit Cards
Interest Rates – The first thing that you should compare when looking for any type of credit card is interest rates. The simple fact is that the interest rates on credit cards are designed to be the brunt of the fees that you’ll find yourself paying. When looking at interest rates, it’s important to pay attention to all different types of rates.
Types Of Rewards – As mentioned above, there are tons of different types of rewards credit cards out there. When you start looking you’ll see offers that provide cash back, travel rewards, gas rewards, and much more. So, one major thing you’re going to need to figure out is what type of rewards work best for you. For instance, if you don’t travel often, airline miles cards may not be your best option. I prefer cash back so that I get extra money to put into my Betterment investment account or Motif investing portfolio.
Fees – Every credit card you come across will have it’s own unique set of fees. The bottom line is, credit cards are a service, and there’s no great service that can survive without income. That being said, some cards will come with much higher fees than others. It’s important to weigh the rewards, how you will use the rewards, and other positive factors of the card against the fees and rates. Your goal is to find an offer with a higher value than cost.
Lenders – Credit cards are a very competitive industry. Therefore, when one lender does something, and it works, you’ll see other lenders start to jump into the trend. That leaves us consumers with a multitude of lenders to choose from, no matter what type of credit card we’re looking for. A good lender can mean a good experience for you, whereas a bad lender could mean a poor borrowing experience. That being said, before you apply for the rewards card that is most appealing to you, take a look at the lender to make sure it’s a name you can trust.
Promotional Savings And Earning Opportunities – Tons of rewards credit cards come with some sort of promotion. Either you’ll find “0% interest for X amount of months”, or you might see “No annual fee for the first year”, or you could come across “Spend X amount of money in your first X amount of months, and earn X amount of extra points.” All of these promotions are opportunities for saving or earning more. Taking advantage of them will help you get more bang for your buck. So, it’s good to try and find an offer that provides this type of promotion.
How Rewards Points Are Earned And What They’re Worth – Finally, you want to take a look to see how fast you’ll be able to earn rewards points and how much money in rewards they are worth. Knowing this will help you to compare the different offers to help you get the most out of your money.