Reward credit cards offer a range of benefits to people in all walks of life by offering a variety of incentives to use their cards. In fact, it seems that there is a reward credit card for almost every type of shopper, with incentives ranging from cashback and discounts to air miles and free hotel rooms.
The best kind of reward credit card for you will depend on how you use your card. There seems to be rewards cards for every need and niche so your bound to find one meeting your needs and lifestyle. So, if you plan to use your card to make a lot of purchases, then the cashback option might be the one for you. If you are a regular traveller then a card with frequent flyer points, car rental discounts or travel insurance might work for you. Put simply, choose a reward card that reflects you lifestyle and your shopping habits when you make a credit card comparison.
Unless there is something very specific you want from a reward credit card, a cashback card is probably the best choice. These cards provide a credit on your next bill based on your purchases, typically around 1%. In this case you’d get back $10 for each one thousand dollars spent on your card. This may be good if you are a heavy credit card user.
When choosing a reward credit card it is a good idea to look at the card as a whole, and not just the reward aspect. The credit card should represent all-round good value for money, with a low interest rate and no hidden fees and charges. For example, 1% cashback is of little value if you are being hit with very high interest rate charges each month.
Like most products in the world of personal finance reward credit cards come with their own terms and conditions, so be sure to read the small print. See if the rewards value is capped each month; do rewards expire or need to be claimed within a fixed time period; and see if there are exclusions or other terms that might prevent rewards being earnt or claimed. If possible you should choose a card with flexible rewards with points or credits that are not capped and don’t expire.
Also, be sure to use your common sense when spending with a reward credit card. It can be tempting to make unnecessary purchases to get those few extra air miles or a little more cashback, but the rewards should not dictate your spending decisions. Try to follow the golden rules that apply to any credit card - pay off your balance each month; don’t exceed your credit limit; and spend wisely.
Used properly and chosen wisely, reward credit cards can offer great benefits so be sure to shop around to find the right one for you.
Article by Richard from creditcardapr.com.sg which compares Singapore credit cards with rewards including HSBC Revolution credit card. Visit the site for more useful information or to apply online.