Among all types of credit cards, credit cards offering rewards or bonus points are usually the ones with the highest interest rates. But if you’re not cash strapped and you’ve got a steady (not to mention abundant) source of income then maybe, this type of credit card is the ideal credit card for you.
The way a credit card offering rewards or bonuses works is quite simple. Each time you use your credit card, you are awarded a point. The number of points you’re awarded depends on the amount of your purchase. You can maximize the use of your credit card if you’re also able to pay off your purchases before it could incur high finance charges. If you don’t, then whatever reward or bonus you’ll be earning, later on, may just be equal to what you’ve paid the company for in terms of interest charges.
There are different types of rewards that are offered by credit card companies and it is certainly better that you choose one that would suit you best to make you more motivated when it comes to paying promptly. Some credit cards offer travel benefits as rewards. These benefits include but are not limited to free air travel, free hotel stays, and rental cars.
To save and earn more using your reward type credit card then it’s better to remember that you should only use your reward type credit card for short-term or cheap purchases which you can easily pay off before it can incur high-interest rates. On the other hand, long term or expensive purchases are better charged to credit cards that do not offer any rewards but have lower ongoing APR. all when you consider the soaring prices for gas.
Secondly, make it a point to shop as much as you can on the stores or brands that are affiliated with your credit card company because it will earn you bonus points that you may not get from other stores.
Lastly, if you’re just planning to get a reward type credit card of your own, do make sure that you get the highest amount of sign up bonus that you can.