Rewards Credit Cards- For every dollar you spend, rewards credit cards give you some kind of “reward,” usually in the form of points, travel miles, or cash back. You can then use your rewards in a variety of ways, depending on the card. Today’s credit card market is dominated by rewards cards, which appear to have something for everyone. The cards differ in terms of how rewards can be redeemed and what they can be used for, as well as in terms of rewards structures.
some credit cards give you benefits in the form of cashback and other useful discounts. the key is to find the best credit cards as per your lifestyle and expenses. for instance, if you travel a significant distance using your vehicle, you can benefit from a fuel credit card. these cards offer benefits for every rupee that you spend on fuel. But don’t stress if you don’t know where to start. here’s a comprehensive list of the best reward credit cards in India, just for you.
Rewards Credit Cards
Checks, statement credits, merchandise purchased through the card company, gift cards, travel benefits, and typically other rewards are available for redemption. Your credit card statement will display your current rewards balance at the conclusion of each billing cycle. In an effort to entice you to sign up for a credit card, many companies also offer introductory bonus rewards. Those offers may include incentives worth hundreds of dollars once you spend a certain amount, as well as an introductory 0% APR for the first few months and no fees for the first year.
Rewards credit cards offer the primary advantage of reward points program and their redemption options. The reward points help you save your hard-earned money and give you the best experience of using a credit card. By spending with these cards on popular categories like online and merchant store shopping, travel and holidays, dining, etc., you earn reward points in bulk. Also, to redeem the accumulated points, you get a number of good and diverse options.
Rewards Credit Cards Details
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How to Compare Rewards Credit Cards?
Here are some crucial features to keep in mind when looking for a rewards credit card.
Annual fees
While many of the most lucrative rewards credit cards charge an annual fee, not all of them do. Therefore, it is essential to compare the value of the rewards you anticipate collecting over the course of the year to the cost of any annual fee before signing up. Unless you spend a lot, paying a high-end card’s annual fee of several hundred dollars could easily wipe out your rewards.
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Interest rates
For the first year, many rewards cards offer a promotional 0% APR. After that, however, you will be charged interest unless you pay off your balance in full each month. Rewards cards can have high interest rates—often 15% to 20% or higher—that quickly add up if you carry a balance. Therefore, just like a high annual fee, interest charges can outweigh any card rewards.
Tiered vs. fixed rewards
Some cards have a tiered reward structure, others are fixed. Tiered cards offer different tiers of rewards for different types of purchases. For example, a tiered card offers 3 points for every dollar spent on gas, but only 1 point for every dollar spent on groceries. Fixed cards, on the other hand, pay the same rewards wherever you use them. For example, a fixed rewards card may offer a 1% or $1.50 rebate on all purchases.
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Cashback spending caps
The maximum amount that you can earn in the most lucrative spending categories on many of the cards that offer cashback rewards is limited. For instance, a card might give you 3% cashback on the first $1,500 you spend on groceries each quarter, but only 1% on every other $1,500 you spend on groceries until the beginning of the next quarter.
A good rewards credit card won’t force you to change your spending habits or spend more just to get rewards. Instead, it will work with your everyday spending.
How to Find the Best Rewards Credit Card for You?
No rewards card is right for everyone, no matter how generous it may appear. A lot depends on your specific circumstances. Therefore, it is worthwhile to take a few additional steps prior to beginning your application.
1. Analyze your spending habits
The best rewards card for you will be one that lets you use the money you normally spend without requiring you to make any changes just to get rewards. Take, for instance, how much money do you spend each month on gas, groceries, or dining out? If this is the case, a card that offers additional rewards in those areas might be the best choice for you.
Do you travel frequently? If that’s the case, the best card for you might be one that rewards travel purchases and lets you use your rewards for future travel. Similarly, a co-branded rewards card issued by a particular company may make sense if you frequently shop at a particular hotel chain or buy the majority of your clothing and household goods there.
Also, think about your overall spending. If you only spend $1,000 or $2,000 per month on your credit cards, a card that requires you to spend $15,000 within the first three months to earn a significant introductory bonus will be of little use to you. Worse yet, it might encourage you to spend too much!) If that’s the case, you should look for a card with a lower minimum spending requirement and, most likely, a lower initial bonus.
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2. Check your credit score
To be eligible for a good rewards card, you will need to have a high credit score. One of the three major national credit reporting agencies, Experian, says that most people need a credit score of at least 670 to be eligible for a rewards card.1 (A secured credit card might be an option for people with lower scores.) Rewards programs are now offered by some of them as well.)
Consider your credit score before applying for a rewards card. If you have a limited or subpar credit history, the cards with better benefits and higher spending limits may not be available to you. Additionally, applying for an excessive number of credit cards may lower your score.
The Bottom Line
There are a lot of rewards cards available, but choosing the right one can take some time and effort. If you need help, Investopedia has lists of the best rewards credit cards for specific user types that are frequently updated. Additionally, keep in mind that you may want more than one rewards card. You can find a strategy that maximizes your return on all of your spending by combining travel, cashback, and points cards.
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