It’s a great time to be a consumer, at least if you’re in the market for reward credit cards. The fact of the matter is that credit card companies are constantly competing for their share of the market, and one of the ways they do that is with reward programs. These programs let you take advantage of that competition, and see a little something come back your way just by using a credit card.
Still, it can be a bit challenging to weed through all of the possible reward credit card options. Here are some things to look at when you’re trying to decide which one you want to sign up for:
- The type of reward. One of the things about reward credit cards is that they don’t all use the same currency. The whole idea of reward credit cards started out as airline “miles.” The programs were geared at business travelers who could save on future airline ticket purchases by using their credit cards. Today, reward credit cards might still use miles, although most of the programs out there have switched to a point system. Some of the best programs actually give you cash, rather than some obscure measurement.
- How fast rewards accumulate. Keeping the type of reward in mind, you need to figure out how fast your rewards grow. If you get half of a percent back in cash on purchases, you might find that getting 1,000 points for every dollar spent is actually a better deal. You need to figure out how quickly you’ll earn those rewards if you want to pick between programs.
- Reward inflation or expiration. Some programs (again, not usually the cash programs) actually expire after a certain amount of time. Your points might disappear if you don’t use them for some programs. In addition, the “point” cost for a particular reward might increase over time. You need to keep those factors in mind when comparing a point-based program to a cash one.
- Special incentives. Some reward credit cards have sign-up incentives, or specific types of activity that can lead to double rewards. If, for example, a particular retailer offers extra rewards when you use the card at that retailer, and it’s a retailer you regularly patronize, it might be a good reward program for you.