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Rewards Program |
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A rewards program is what many credit card issuers are offering their cardholders. The goal of a rewards program is to encourage credit card holders to use just one credit card to make their purchases.
These days, rewards programs are all the rage. There seems almost to be a never-ending competition amongst credit card issuers to see which one can come up with the biggest and best rewards program. That’s great for those issuing the credit cards, but it can be downright confusing for consumers. And dangerous, too.
How do you know if a credit card with a rewards program is right for you? Financial experts advise a simple way of making this determination. Do you tend to carry a balance on your credit cards or do you regularly pay the balance in full every month? If you carry a balance, you might find that the higher rates of interest that rewards program credit cards carry offset any benefit or reward you would derive from using that credit card.
And even if you do charge on your credit cards only as much as you can afford to pay each month, you still need to proceed with caution when choosing a rewards program.
You see, the problem with many of the rewards programs is that they are very restrictive. If you choose a card that offers frequent flyer points you may be required to redeem those points with a specific airline carrier. And even if you have more flexibility in choosing an airline carrier, you might be required to utilize a specific travel agency when you go to redeem your rewards. That agency might not get you as good a deal as you might have gotten had you made the arrangements on your own.
Another problem with some of the rewards programs is that they oftentimes have in place unreasonable time restrictions. For example you may have to earn your points and/or book your flights or hotel rooms within a year or two. You many also find that some list black out dates which happen to coincide with busy travel times – those times during the year when you are most likely to travel. In that case, any reward you’ve earned will actually be worthless.
This isn’t to say that all rewards programs are bad. Some are very good and many have gotten less restrictive. It’s just important that you check into the rewards program details so you know exactly what you need to do to earn those rewards!
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