How To Get The Most From Your Rewards Credit Card - Part 2

In the previous section of this article we discussed a little about reward credit cards and how they can help you. In this article we are going to delve a little further into the world of rewards based credit cards in order to help you make the right decision. As previously discussed the rewards cards are not going to benefit you unless you use them on a regular basis. This means that you have to use it on almost every purchase you make, and that those purchases should be based on how you get the rewards. A card that offers concert tickets, and other event tickets exists, but if you do not have the income to support this type of purchase on a regular basis you are in actuality, not saving anything. You see the points or cash back are rewarded on huge amounts spent. Since it can take more than a pound to earn a point you may find that using the credit card is more detrimental to your overall budget. You see if you can’t pay off the balance you have on the card every month you are going to be paying interest. Since interest increases at a higher rate for the amount on a credit card you may not save anything when you use a rewards card.

The point is that reward cards have their uses, and if you are the correct person for the card, and you can find a card that fits your needs you can make it work. However just getting one of these cards to make a large purchase in one month and then not using it again may not net you enough points. You have to look at each reward card for the amount of points or cash back you can earn on the purchases that apply. Some cards offer great introductory rates in which you get 5 points for every pound you spend, of course the introductory rate usually lasts for thirty to ninety days, and then it reverts to the normal point system. Most cards offer one point for every pound spent, however some cards are only going to offer one point for every two or four pounds spent. So you see it takes a bit of research to find out if you should even consider having one of these reward cards.

The other issue to keep in mind is that you have to be able to pay the balance in full before the interest rate is applied. This means that every month after you have made a purchase you need to pay it off. Even cards that offer 0% APR for the first month or two will still revert back after a time. This of course means in three months if you haven’t paid it off you are going to start paying interest. Overall you will find that you should never make cash withdrawals or have a lot of transactions on the cards if you are not going to use them to your advantage.

Back To January 2008 Financial News
Purchasing with Credit Cards
Traps with Credit Cards
Understanding Credit Scoring
What Is A Credit Reference Agency
Testing Your Debt
10 Ways To Save Money
Benefits of Savings
How To Save of Invest Your Money
Individual Savings Accounts
Sainsbury’s Bank Internet Savings Account
Product Types For Savings
Saving with Child Trust Funds
Savings and Investments Advice
Trouble Ahead with Free Banking
Warning: Savings Rate Change
What Makes Consistent Savings Account?
Credit Building Solutions
Britain Needs to Protect Itself
Free Banking or Unfair Bank Charges
Reintroducing Child Savings
How To Get The Most From Reward Credit Cards - Part 1
How To Get The Most From Reward Credit Cards - Part 2
UK Economy Growth
UK Rate Cut
US Recession and Britain