Congratulations! Your credit score is amazing and you are looking for a rewards credit card to capitalize on your responsibility! But how do you go about choosing the one that is right for you? I get this question a lot, so let’s take a deeper dive into questions and considerations before you start applying.
Types of Rewards Credit Card
There are quite a few types of rewards credit cards you can choose from. Some examples are cash back, points, hotel cards, travel cards, airline cards, specific store cards, general store rewards, and balance transfer cards.
Questions To Ask Yourself
What do I want to get out of the rewards credit card?
If you like to travel, you may wish to look into airline or hotel credit cards. If you are looking to build your savings or have a little extra cash every month, you may wish to look into a cash back card. This answer may also depend on the season of life you are in. For example, my first credit card was a cash back one because that is what was most useful to me at that time. Then, my kids got a little older and we love to do weekend getaways. Now, a good hotel rewards credit card is most useful to me. We get to travel a bit and have free hotel stays.
Can I pay off the balance every month?
Listen, you want the benefits without paying the interest, right? Be the person the credit card companies don’t really like. <wink, wink> Pay your balance off every month, reap all the rewards possible, and never pay them extra in the form of interest.
What is the annual fee?
There are some rewards credit cards that have an annual fee and some that do not. This fee can range from $0 to several hundred dollars. The thing you want to keep in mind is: Do the benefits of the card outweigh the cost of the card? If they do, hooray! If not, keep looking.
What about a balance transfer card?
Balance transfer cards can be that helping hand you need in order to pay down your debt. For the length of the introductory period (usually 12 – 18 months), you can pay off your principal and not pay any interest. If you are struggling with your debt, this may be a beneficial option for you. The big question to ask yourself is, “Can I realistically pay off this debt in the time provided?” If you have debt that will take you longer than a few months to pay off, but not enough that you can’t pay it off in a year to a year and half, this may be an option. Read more about the considerations of a balance transfer card here.
Final Thoughts
Having a rewards credit card definitely has its perks and benefits. Using one responsibly can really add value to your life. Earn more on your purchases AND build your credit! In beginning your research into the best ones for you, check out The Points Guy and NerdWallet and see what they say about rewards credit cards. There’s great info on those sites!
If you need help in taking back control of your finances instead of having your money control you, check out Ford Financial Management. See if we are a good fit to work together. Our whole mission is to reduce money stress and anxiety so you Sleep Well At Night. Schedule your free consultation and speak with an Accredited Financial Counselor.
