Believe it or not, there isn’t a “one size fits all” credit card rewards program. For every card on the market, it seems like there are a million different ways to earn rewards.
With all the options, the research can be overwhelming and you might not know where to start. We’ve come up with a few ways you can choose the right credit card rewards program.
Is a rewards card right for you?
That’s the first question you need to ask yourself. A rewards card isn’t right for everyone. Here’s a handy checklist to run through to help you decide whether or not a rewards card is a good fit for you:
You have a good credit score. Most card issuers are looking for consumers who have a FICO score of at least 670. Of course, a higher credit score will help you get a lower interest rate, but at that mid-600 range, you will get your foot in the door. FYI, the higher your credit score, the more lucrative rewards programs you’ll have access to.
You can pay off your balance every month. Rewards cards usually have a higher-than-average interest rate. When you carry your balance over each month, you could end up paying more in interest charges than you earn in rewards.
You can maximize the value of your rewards. A rewards card can cost you money if you don’t maximize your reward-earning potential. If you don’t earn enough points, you can actually lose money if your card has an annual fee.
Now that you’ve determined you could benefit from a rewards card, let’s talk about choosing the card with the program that best suits your lifestyle and spending habits.
Choosing the right card
There are three main things to consider when choosing a card: your spending habits, personal preferences and credit score. If you don’t look at your spending habits and personal preferences, you could end up spending a lot of money and racking up rewards that aren’t right for you.
Let’s say you have a large family and your primary expenses are groceries and gas. It would make sense for you to have a credit card that offers bonus rewards on those purchases. But, if you’re single, have a small grocery budget or don’t have a car, those rewards wouldn’t make sense.
Use your cards for everything
The more you use your card, the more rewards points you’ll rack up. But, don’t let that be an invitation to start spending money on things you don’t need. Instead, use your credit card in the place of cash or your debit card whenever possible.
Start looking for everyday situations where you can use your credit card instead of another payment method – gas, groceries, food, etc. But, always make sure you only spend what you can pay off every month.
What if a rewards card isn’t for you?
Rewards cards aren’t for everyone, and there’s nothing wrong with that. Maybe your credit score isn’t in the right range for a rewards card, or maybe you’re not interested in using your card to gain rewards. Maybe you’re looking for a credit card for emergencies only. If that’s the case, we can help you. We have a number of credit card options, and some have super low APRs, great rates on balance transfers and low rates on cash advances.