Not all credit cards offer rewards, but the ones that do, offer you a value back every time you make a purchase using it. These cards are aptly recognised as rewards credit cards. Rewards credit cards provide the customer with an opportunity to get some perks or rewards in the name of cash back, points or miles. If you have chosen the right rewards card for your wallet, you can earn a considerable amount of extra purchase money, free travel and privileges.
In simple words, rewards credit cards India is a sort of credit card that helps the cardholders to earn rewards in terms of points, cash or miles with every purchase they make such as fuel top-up, groceries shopping, travel tickets or any online shopping. However, using a rewards credit card can be a double-edged sword. The key is to use these reward cards responsibly without changing your spending habits to gain an incredible amount of value.
Here is the rundown of the pros and cons to keep in mind before applying for any rewards credit card.
Pros associated with Rewards Credit Cards to take Advantage
- Earning Reward Point on Expenses
Most reward cards offer cash backs, miles, or points on every purchase you make. Earning rewards on every purchase you make is the number one advantage of rewards credit cards. To secure the reward points, the cardholder needs to spend a predetermined minimum amount. These rewards can then be redeemed for retail products, to book airline tickets, gift vouchers or other perks and privileges when needed.
- Snatch Exciting Cash back Offers
Another exciting benefit of having a rewards credit card is being able to earn cash backs whenever you spend using your credit card. You can easily save your hard-earned money by availing the cash back offers given on the purchases. You can use these cash back to buy products of your choice.
- Travel, Shopping and Protection perks
Apart from getting cash back and reward points, cardholders can also benefit from the exclusive privileges extended to them for using rewards credit cards. These reward packages include travel accident insurance, car rental insurance, baggage insurance, card and cash emergency replacement, no liability on unauthorized charges and others. They also provide extended warranty insurance, purchase protection, and fraud protection that narrow your obligation if your card information is stolen.
- Get Discounted Rates
Most reward credit cards often provide rebates on the purchases made using the card. Meaning, every time you purchase an item, the companies offer a certain percentage of discount on these products. Similar to the cash back points, you can easily use these rebates to buy new products or pay off your credit balances on the card.
Cons of Using Reward Credit Cards
- High-Interest Rates
The interest rates of rewards credit cards are generally higher than non-rewards cards. Most of these rewards credit cards come with variable interest rates, which means the amount you are paying today can become expensive with the time. Generally, rewards credit cards with a low introductory rate offer rises dramatically once the introductory period is over. Be aware of the interest rates while choosing a reward credit card.
- Over-priced Annual Fees
Aside from the high-interest rates, annual fees can dig deeper into your pockets as well. Often these rewards credit cards have an exorbitant annual fee. That’s why it is important to research thoroughly for cards that offer a low annual fee or no annual fee at all. Before making any choice, always consider the annual fee, whether the benefits you are getting is worth the annual fee or not.
- A Tendency to Spend More
When you are earning points on every penny you spend, it increases the tendency to spend even more. But, whether you agree with it or not, the spending is on your hands. However, if you are using more money than your budget to earn benefits, your card may not be as profitable as you would like it to be.
- Rewards Limitations
Another thing to take into account is the reward limitations on collecting and redeeming the points. There are many rewards credit cards that offer bountiful points until you reach the maximum amount spending. In some cases, the credit cards strip off the points after a limited period. In such a situation, redeem the points within the limited period; otherwise, all those hard-earned points will go wasted.
You have to watch out for these limitations. Ensure to take time to read all the terms and conditions and make sure that there are no unreasonable terms before signing up for any rewards credit card.
Ready to Earn Maximum out of Rewards Credit Cards?
Being aware of all the pros and cons is the best strategy to reap maximum benefits from rewards credit cards. No matter how exciting the offers are on these cards until you consider the disadvantages into account. Always start with researching online and knowing all the features and possible limitations of particular rewards credit cards you are interested in.
Namaste ! Find fastest way to follow The Market.