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How To Get The Most Out Of Credit Card Reward Schemes |
By:
Emma Stephens |
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How To Get The Most Out Of Credit Card Reward Schemes
Emma Stephens
When investigating reward cards you may find that since most cards these days don't have to offer reward schemes, as people often sign up for the standard card associated with their account, there are few truly rewarding cards around. The most important thing to remember is to look around and see what is available to you and figure out whether these 'benefits' really will make a difference to you, and your current spending habits, or whether they're simply there to lure you in to signing up. Card reward schemes are only ever a beneficial way to spend when you are not being charged interest, so make sure you aren't losing out before you start.
Rewards may not always be what they seem - be aware of the conditions that apply in order to receive your rewards. Some credit cards appear to offer great perks but don't follow through - for example, the much-cited holiday insurance policy that many cards include as standard, may not be as good as it seems if, in order to claim back goods stolen or lost, you must claim within a strict time limit, and even in some cases be within a certain age range.
A common mistake people make is applying for a credit card appropriate to a lifestyle that they imagine themselves having in x amount of years, rather than the lifestyle they have right now. Perhaps they think that they can use a card to supplement their income until they receive some notional salary increase in the future, or choose a card that gives great deals on air miles even though they currently don't ever leave the ground! It is vital to look at your finances with brutal honesty and factor in all the unknowns that could hinder future repayments. There is simply no point in applying for a card that provides money off petrol if you don't own a car but intend to buy one at some point in the future, but you end up being unable to afford the monthly interest in the mean time.
Read the small print and make sure you are not paying an annual fee. Most cards no longer charge you for this, so ensure that you are not one of the few who still are. There can be hidden charges on balance transfers and, while 0% interest on balance transfers sounds enticing, a large handling fee is not. Checking online at a comparison site such as moneysupermarket.com will help you look past the alluring introductory offers and establish the potential pitfalls of each card.
When you receive your chosen card make a note of introductory offer expiration dates e.g. the new nectar card offers double points for the first 3 months so making a date in your calendar of when this time limit is up and buying all of your bigger purchases within this time frame will help you to maximise on points as well as getting you onboard security under section 75 of consumers law if the product costs over 100.
The golden rule as far as credit card reward schemes are concerned, (as cited by online independent specialists such as moneyexpert.com/ is only to sign up with schemes where you intend NEVER to pay any interest. The bottom line is that whenever you pay any interest you instantly lose out on the benefits you are buying into. This means that you will have to project how much you can afford to repay every month so as not to pay interest AND choose a card with an appropriate credit limit in order to get cash back from any card. Repaying your outstanding balance every month in full ensures you get your full cash back entitlement and could further increase your credit rating. Maintaining a "0" balance at the end of each month also means you will be in the best position to apply for more cards later or to apply for a mortgage should you need one.
Read what Emma Stephens says about http://www.mbna.co.uk) Credit Card Reward Schemes. She has reviewed Reward Scheme http://www.mbna.co.uk) benefits of Credit Cards, Reward Schemes pros and cons and other considerations
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Article Source: http://www.statssheet.com/articles/article67518.html |
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