You get them in the mail, you see the ads on T.
V.
Cash back on your everyday purchases, 25,000 bonus airline miles just for applying for a credit card.
Get this, get that.
Sounds like a great deal, but is it? The answer, yes and no.
A responsible consumer can make the most of their rewards by purchasing everything they shop for and rack up points, miles or cash rewards, and rack them up fast.
The responsible consumer will also pay off the balance at the end of the month or 30 day billing cycle to avoid any finance fees on their purchase.
By doing so, they will accumulate rewards, interest and fee free, and may find themselves getting a free airline ticket or cash back from a gas rebates card.
On the other hand, the consumer who racks up their credit card bill, and doesn't pay off their balances each month, will find themselves paying interest on their purchases, and those finance charges can (and sometimes will) cost more than the rewards they were so actively seeking.
But there's more, a responsible consumer can also get burned if not reading all the fine print.
Some credit cards have annual fees.
If an annual fee offsets the dollar amount of a cash reward or airline ticket, then the whole point of the credit card rewards program is a wash or a loss.
To get the most out of credit card rewards, look for a credit card with a 0% intro A.
P.
R.
, no annual fee, and a minimum of 30 days grace period on purchases before interest begins accruing on daily balances.
Also read the fine print and make yourself aware of what the annual percentage rate (APR) will become after the introductory APR expires.
Be sure to pay off the balance in full each month and you will find yourself enjoying the true rewards that credit cards offer.
For a complete breakdown and comparative analysis of credit cards rewards by their category, annual fees, and interest rates, consumers can make an informed decision before applying for a card rather than finding out the hard way, whether or not the card was the right or wrong one for them.
V.
Cash back on your everyday purchases, 25,000 bonus airline miles just for applying for a credit card.
Get this, get that.
Sounds like a great deal, but is it? The answer, yes and no.
A responsible consumer can make the most of their rewards by purchasing everything they shop for and rack up points, miles or cash rewards, and rack them up fast.
The responsible consumer will also pay off the balance at the end of the month or 30 day billing cycle to avoid any finance fees on their purchase.
By doing so, they will accumulate rewards, interest and fee free, and may find themselves getting a free airline ticket or cash back from a gas rebates card.
On the other hand, the consumer who racks up their credit card bill, and doesn't pay off their balances each month, will find themselves paying interest on their purchases, and those finance charges can (and sometimes will) cost more than the rewards they were so actively seeking.
But there's more, a responsible consumer can also get burned if not reading all the fine print.
Some credit cards have annual fees.
If an annual fee offsets the dollar amount of a cash reward or airline ticket, then the whole point of the credit card rewards program is a wash or a loss.
To get the most out of credit card rewards, look for a credit card with a 0% intro A.
P.
R.
, no annual fee, and a minimum of 30 days grace period on purchases before interest begins accruing on daily balances.
Also read the fine print and make yourself aware of what the annual percentage rate (APR) will become after the introductory APR expires.
Be sure to pay off the balance in full each month and you will find yourself enjoying the true rewards that credit cards offer.
For a complete breakdown and comparative analysis of credit cards rewards by their category, annual fees, and interest rates, consumers can make an informed decision before applying for a card rather than finding out the hard way, whether or not the card was the right or wrong one for them.