How to Choose a Rewards Credit Card
College students have nearly unlimited access to credit cards. Major issuers include Wells Fargo, Citi, Chase and Bank of America, all of whom vie for young consumer attention. However, before you attain a credit card, become an educated consumer. Do choose a credit card that will maximize your spending and savings potential.
All credit cards are short-term loans. Therefore, always remember that when you utilize your credit card, you are borrowing money from a corporate lender. Remain aware that this financial transaction should be repaid, in full, by the next bill cycle. Failure to pay your balance will result in hefty fees. It can also void the current terms of your financial contract.
Contemporary consumers and retailers realize that credit cards are a fundamental cornerstone of the modern day marketplace. For most individuals, it is commonplace to utilize credit cards to pay for goods and services of any kind, including gas, food, salon services, clothing, medical treatment, etc. Because of this daily usage, the credit card has become an integral component of daily life. Thus, the everyday nature of the credit card has made it necessary to select a credit card that offers additional bonuses. Usually, the best bonuses are found in rewards credit cards.
Rewards credit cards are credit cards that offer a variety of incentives to the consumer in exchange for its use. In general, there are three types of reward cards: low interest premium, no fee premium, and rebate cards.
Low interest premium cards are ideal for those individuals who tend to carry a balance. Wells Fargo Bank, Pulaski Bank & Trust and First National Bank of Chester Co. all offer cards with ‘late’ or ‘over limit’ fees that are considerably lower than other major credit cards.
No-fee premium cards often waive the annual fee. In exchange for the lack of an annual maintenance fee, some of these cards impose higher late fees. Capital One and Citibank offer excellent no fee premium cards with reasonable grace periods. These grace periods will average approximately 23 days.
Always read the fine print on all no fee cards. In some instances, the lenders will waive the annual fee for a set amount of time. This period can range from 6 months – 2 years before an annual fee is enacted. In other circumstances, the traditional annual fee is applicable as soon as the consumer misses a payment or submits the payment late.
Rebate cards were the original rewards cards. These cards may offer rebates in the form of gasoline cards for every dollar spent. Usually these cards lack an annual fee. Discover Gas Card and Shell MasterCard are popular gas oriented rebated cards.
Other rebate cards extend their consumer benefits even further. Oftentimes, your car insurer may offer a rewards card. These cards may offer discounts to popular travel agencies or travel airlines in exchange for a percentage of points earned from the dollars you have spent on the card. Most rewards cards work in similar manners: the more money you spend with the credit card, the higher the level of rebates, bonuses or discounts earned.
In general, the cardholder will accrue rewards based on the dollar amount of a purchase on that particular credit card over a designated period. Reward cards may grant users free airline tickets, entertainment rewards, and discounts in physical and virtual retail chains such as Target, Wal-Mart, Overstock.com, and Ice.com. Rewards cards are very costly to the lender, which leads to a higher annual fee or high fees that are applied to delinquent credit accounts. In spite of that, however, it is possible to find cards without annual fees. For example, Ibsworldpoints.com offers information on its rewards program. Citi and Chase are two major issuers who offer excellent rebate rewards packages.
Traditionally, gas rebate cards were affiliated with a specific company or brand of gas. At present, the rules are changing and, with increasing frequency, consumers have the chance to save money regardless of where they fill up. The AAA Visa Card is one of the most enticing cards because it offers a five percent rebate on any brand of gas.
At the end of the day, all rewards cards are designed to stimulate consumer consumption of goods, products and services. To boost your credit score, you will still need to become a responsible user of any credit card, regardless of whether it is or is not a rewards credit card.
