It can sometimes be tough to cut through all of the promotional material that credit card companies use to promote their cards and find out what kind of cardmember benefits are best for you. While some swear by cash back rewards there are some that hold that other rewards such as airline miles are a better investment in the long run. Depending on your lifestyle one truly will be better than the other, but to help you make that decision we are taking a closer look at these cardmember perks.
Is it a welcome offer?
One of the first factors that you should take into consideration is whether the reward in question comes with a strong welcome offer. In some cases, the first few months of card membership can earn you a number of rewards that may take years to match after that initial offer has expired. This can be a double-edged sword, however, as these offers often come with minimum purchase requirements that can be quite high. So even though you may be able to earn a sufficient amount of awards to finance a vacation you may find when all is said and done you may have been better served to put the expenses of that vacation on a card that offers cash back.
Types of Rewards
The most common type of credit card reward is airline miles, and if you have a lifestyle that requires travel this can pay off very quickly. However, other credit cards offer shopping rewards that can significantly reduce the amount you pay when you indulge yourself with online shopping. For you, the best card rewards may come in the form of a discount at your favorite places to eat out or even at the grocery store. Being honest with yourself about your own spending habits is the first step toward determining what rewards will be most beneficial to you in the long run.
The drawbacks of cashback rewards
There are a lot of reasons to opt for cash back rather than other forms of membership rewards, but with these also come certain drawbacks. One of the most obvious is that you may notice that cashback rewards tend to be fairly low. A card that offers 1.5% cashback on all purchases and has an APR of 9.9% may be a good deal if you pay your full balance during the grace period, but a penny-and-a-half on the dollar spent takes a long time to build up to a sum that is significant enough to worry about. Even the most tight-fisted rewards program will often be able to offer 6-10 times that value because of established relationships with the businesses that are benefiting from your rewards purchase.
No matter what choice you end up making, credit card rewards can be a great way to save up for the things you enjoy the most. For more great tips regarding credit card rewards, take a look at our online credit card finder.