There are many different credit cards on the market today offering rewards or cash backs. Which one is the best rewards credit card? And which ones should you avoid? In this article I'm going to discuss the top three benefits cards and why they're worth your consideration. Hopefully by the time you've finished reading this article, you'll have a good idea which of the rewards credit cards are going to best suit your needs.
First off, lets look at the best rewards credit card. A cash back rewards credit card makes perfect sense if you always pay your entire bill on time. If you carry a high balance from month to month then the interest-free or low rate credit you're paying on that credit can quickly wipe out any value of the rewards you'd receive; otherwise you would be better off using a low interest credit card, or even a balance transfer credit card which would allow you to repay your balance at a pre-determined amount. The reason it makes financial sense to use one of these cards is that by paying less interest you will automatically save money. Also, by paying into the rewards program, your spending is limited to the amount you actually spend – no more buying that sweater you saw in the mall – now you can only buy that sweater if and when you feel like wearing it.
Second, lets look at a rewards credit card that offers airline miles. If you use this type of card to redeem for air miles then you're basically taking the air miles you have already accumulated and putting them towards earning free tickets. Sounds like a great deal, doesn't it? You're spending money that you don't have and getting free tickets to anywhere you want!
Now here's another example of another type of credit card. Are you good with cold calling? Did you know that some hotels are offering a loyalty program where if you stay with them for a certain period of time they will offer you a discount on your next stay? Hotels like Starwood, Sheraton, and Hilton are a great option because not only do you get great discounts but you can also earn points towards free stays or even being able to use those points towards airline miles.
Is this a better option than just paying cash for your room? Not really. In fact, when you redeem for air miles you're basically paying the same interest rate that you would for an overpriced premium hotel room. And with hotels seeing their profits tumble (not nearly as much as airline companies) it's hard for them to offer any incentive for staying with them. If I'm going to spend my points or earn cash back on my credit card rewards then I'd rather use them towards a discounted room in a nice hotel than on an expensive airline ticket. Plus, I'm sure you'll agree, the rewards offered by these cards far outweigh the cost of the reward.
Now let's look at airlines and their rewards programs. They offer a variety of incentives from gift cards to gasoline rebates, air miles to apparel and other grocery store gift cards. What is the best incentive to earn airline miles and earn cash back from travel cards?
As you can see, there are many factors to consider before you choose to maximize your credit card rewards. The above two examples are great ways to start, but what if you already have a rewards card? Can you take advantage of other offers? How should you be using your credit card to maximize its earnings?
Well, there are lots of ways to increase your spending and save your spending money. You should look for airline programs, hotel programs and more. Then look for a credit card with the best rewards credit cards offers that matches your spending style.
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