Credit Cards with Rewards

Many invitations to credit cards entice you to transfer your balances from your existing credit card issuers to new credit cards with 0% interest offers. While these are attractive, credit cards with rewards may be more useful to you at times. Cards with rewards are often refered to as reward cards.

There are some things to watch out for with the 0% interest offers. First, there is the strong possibility that credit card issuers may no longer offer these rates as a result of the recent Office of Fair Trading crackdown on charges and fees imposed by credit cards.

Second, even if the offers persist, you should entertain them only if they are relevant to your own credit card behaviour. If you often use your credit cards to purchase expensive things which you then pay off gradually, you might want to look for credit cards that give 0% to new purchases instead of to balance transfers. 

On the other hand, if you have existing balances on other credit cards, then transferring these to a 0% credit card may take hundreds of pounds off your monthly outgoings for interest; it would be to your interest then to look for credit cards that give 0% rate on balance transfers.

Then again, if you’re the type who pays off your entire balance each month, the 0% rate offer will not be that useful to you. You already enjoy 0% rate during the interest-free period, which is about 30 days on the average, given by most credit cards.

You might be better off looking for credit cards that give substantial cash-backs and rewards points. There are a number of these credit cards on the market. The business owner will find immense benefits from credit cards that offer special cash-back discounts on purchases that may make up a significant part of operating expenses in a business.

For instance, some credit cards may give 5% cash-backs on purchases of office supplies from standalone office supply merchants, or petrol, or certain key services like tax preparation, courier services, and the like. The cash-back rate is lower on purchases of other items. For rewards programmes, the special items may receive three or more rewards points whereas other items get only one rewards point.

The rewards schemes for airline tickets are familiar to most credit card holders. Some credit cards will allow you to accumulate and redeem points in the form of airline tickets. There are other credit cards where you handle the booking of your airline tickets. You then get a statement credit on the points you accumulate and use that to arrange better deals from airlines, hotels and car rentals. This is a big help to those who travel frequently, as this other scheme allows you to avoid redemption restrictions such as the requirement to book 21 days before your planned departure date.

Credit cards also have special rewards programmes for those who do not fly often. These credit cards give more points to charges made at restaurants, petrol stations and other items. But whichever rewards scheme you select, keep an eye for the special bonus points that you’ll get as a new credit card holder.

Back To Financial News September 2007