Credit Card

Rewards-Based Credit Cards – Should You Get one?

Rewards-Based Credit Cards - Should You Get one?
Posted by Adam

Despite the effects of the global financial crisis, there are still many different types of credit available these days, including a range of credit cards designed to meet the diverse needs of today’s borrowers. From balance transfer credit cards and 0% interest credit cards through to bad credit history credit cards and cash back credit cards, there is a card to suit every need. The choice of cards available is pretty good, particularly for those with a good credit history and high credit score.

Cards that offer valuable rewards

One of the credit cards types available from a number of financial providers is the rewards based credit card, and this is a credit card that enables users to earn one of a variety of rewards simply by using the card. The rewards that you can earn with these cards can range from cash back and discounts to travel rewards and air miles. When you take out a rewards based credit card, you simply need to check what sort of reward is offered so that you can choose a card that offers rewards that will benefit you.

Who can benefit from a rewards-based card?

So, who can benefit from rewards based credit cards? Well, it is important to remember that these cards are not going to be suited to everyone. The reasons for this is that the interest rates on credit cards can be really high, so if you are planning to repay your credit card balance gradually you will be far better off with a low interest or interest free credit card. If you use a rewards-based credit card and then spread your repayments, the amount that you pay in interest will by far outweigh the rewards that you earn.

If, on the other hand, you plan to repay the balance on your credit card within the standard interest free period each month, rewards based cards could be perfect for you. This is because you will not be charged any interest as you are repaying the balance off in full each month. So, any rewards that you earn are a bonus, giving you a little something back for using your card to make purchases.

What should you use the credit card for?

It is also worth noting that the rewards offered by these cards are not offered on cash transactions such as withdrawals, so if you want to focus on earning rewards you should try and avoid these sorts of transactions. You will, however, earn rewards when you use your card to make purchases in person, online or by phone. The level of the rewards that you earn is generally small, but if you use your card a lot they can quickly add up.