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Which Credit Card Rewards Program is Right for You?

It seems nearly every week credit card companies put out a new rewards card or membership bonus that appeal to our desires as consumers who would like to get bonuses and rewards through their credit cards. Credit card companies are currently offering record-breaking sign up bonuses for customers.
But with all the great deals and rewards programs that credit card companies are offering, it may be hard to decide what you want. Take a look below and see which rewards program is right for you.

Cash Back Rewards

Cash back rewards may sound great, but you must be careful if you're trying to get the most from your credit card rewards. It's easy to get excited about a credit card that gives you cash back on certain purchases but they last thing anyone wants is a credit card from which they don't receive many perks. 
For example, you must take into account your spending habits. Some credit cards offer a higher percentage of cash back for purchases made at restaurants, so spend accordingly. Other credit card providers will choose the industries in which cash back rewards are available. For instance, your credit card provider may offer cash back on purchases like gasoline, airline tickets, hotels, or groceries; however, they may rotate these industries monthly, so it's important to pay close attention to what industries offer cash back each month so you can maximize your cash back rewards.
Some credit card providers are better than others, but usually the rate is about 1.5% cash back on purchases. Others offer a larger cash back reward if you spend over a certain amount within the first month. Also, some providers offer a higher cash back percentage but they may charge an initial fee to qualify for such a rate. However, if you are a high spender and use your credit card for over $2000 per month, the cash back rewards could offset the initial fee and the credit card owner can save hundreds of dollars a year. 

Balance Transfers

If you have a current credit card with a high interest rate, transferring your balance to a new credit card is a good way to lower your payment rates. Some credit cards providers will waive interest fees for the first few months so they can get you account on their cards. 
It's a great way to reduce your interest payments, but what's the catch? The credit card companies seem so generous with someone with an already high interest rate because they are betting on that person falling back into their old habits. When this happens the credit card company can push your interest rate above 20% and you'll find yourself in a similar, or even worse, situation. 
Building up Airline Miles and Points
If you're a frequent traveler or you would like to earn miles for the big vacation of your dreams, having a card that rewards certain purchases with airline miles is probably a good idea. It makes perfect sense, right? Purchases you make with your airline miles credit card will give you miles for future use on airline tickets. And while it's true that you can earn miles and even be eligible for first-class upgrades at certain airlines, it's also important to be aware of any restrictions imposed on those cards and how those cards can be used. The last thing anyone wants is to think you've been saving up miles to go somewhere fun, only to find out that the purchases they've been making don't go to airline miles rewards. 
It's also important to note that not all credit cards with airline mile rewards are actual miles you can use on purchasing tickets. Somer credit card providers offer mileage points that can later be changed into travel benefits like discounts on tickets, hotels, or car rentals but these are all too often overburdened with restrictions and could also have an unfavourable exchange rate when dealing with purchases or benefits overseas. These points can sometimes be redeemed for merchandise or other goods and may not be limited to airline miles. 

So Which Credit Card Rewards Program is Right for You?

When searching for a credit card with rewards it's obviously important to get a rewards program that will cater to your specific shopping preferences while also giving you the most rewards possible. 
First, take a look at your spending habits with credit cards. Do you use your credit card with specific purchases? If so, find a card that will offer you rewards on those purchases. Focusing your credit card purchases on gas or groceries while using a credit card that rewards gas or groceries purchases is a great way to get the most out of your credit card benefits. 
Also, for someone who travels a lot or would like to travel in the future, a credit card that rewards you with airline miles or benefits is perfect, but be careful of credit cards who don't offer the best rewards possible. Airline miles don't always transfer over directly into travel miles, so make sure you read the fine print when applying for such credit card reward programs. 
And if you're seeking to lower your current interest payment, transferring your credit balance to a new provider is a good way to lower your interest rate, but be careful because credit card companies are eager to take on a client with a weak credit history so they can hike up interest rates sky high upon failure to meet payments.
When done properly and carefully, using credit card rewards programs can be incredibly beneficial. They can help you save money on travel and living expenses and open up worlds of possibilities.

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Alice Bryant's picture

Alice Bryant is the Editor of Creditnet and a personal finance expert with over a decade of experience writing about credit cards, credit scores, debt repair, and more.

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