Applying for a new credit card? Now is a great time to take advantages of many of the excellent rewards offered to new cardholders. There are a lot of options out there to consider so make sure you do some homework and pick a card that truly works for you.
One of the best options for many cardholders is a rewards card that can help offset spending costs by providing cash back on certain purchases or by letting you collect and cash in points for things like travel costs, merchandise, gift cards and more. Read on for tips to help you get the most rewarding card this season.
What is a rewards card?
These credit cards reward you for purchases made when you use the card. The more you spend, the more rewards you can earn. Rewards may be based on a percentage of your overall spending or on purchases made at specific types of stores (gas, grocery, etc.). There is some strategy involved to maximizing your reward. You don’t want to overspend and blow your budget just to get some cash back.
A rewards card may be right for you if:
You have good or excellent credit
You don’t generally carry a balance from month to month
You travel regularly and can use airline or hotel points
You tend to spend the most in specific categories – such as groceries, gas or dining out
Don’t change your spending habits to chase rewards. Instead, find a card that rewards you the most for how you typically use your credit card.
Types of rewards cards
There are many types of rewards credit cards to consider, but most of these cards fall into one of the following four categories:
Other factors to consider when getting a new credit card
While shopping for the best rewards card, don’t forget to take into account additional factors that can impact your choice.
Annual fees: Annual fees can quickly offset your cash back or rewards points. Choose a card with low or no annual fees to maximize your benefits.
Foreign transaction fees and card acceptance: If you do a lot of traveling overseas, make sure your card is widely accepted globally and won’t saddle you with high transaction fees.
Your credit score: Your credit score will impact your eligibility for certain cards, so work to build this up as much as possible to get the lowest APR and best rewards out available. Here are some tips to help you manage your credit score.
Rewards cards can help you earn benefits just by doing your regular, day-to-day shopping. As long as you pay off your balance each month so your interest payments don’t outweigh the rewards you are earning, these cards can offer you big savings on the things you buy the most.