Credit Card companies depend on using confusing language and flowery words to have you signing up for nearly every card that card your way. Although it is great to build your credit, several maxed-out CC’s is a sure-fire way to leave in a vulnerable financial position. Here are tips and mistakes to look out for when considering credit card reward programs.
Pay Attention To Annual Fees
According to a 2018 U.S survey consumer payment study, 79% of people sign up for credit cards simply because of the rewards they might earn rather than the high-interest rates of the card.
You likely won't focus on the annual fees when you get your credit card because most are waived within the first year, however most people get comfortable and forget about annual fees altogether–a mistake that can cost anywhere from $100 onwards.
To avoid falling victim to an annual fee, be sure to call your credit card company and ask them to waive them or downgrade to another card. Depending on the fee, cancelling a card may be an option as long as a card cancellation does not affect your overall credit score.
Depending on the fee, cancelling a card may be an option as long as a card cancellation does not affect your overall credit score.
Stay On Top Of Redeeming Points
Most credit cards have some sort of rewards system but do not make the mistake of registering and using many cards to reap the benefits. Over 30% of CC users don’t even redeem points or wind up losing points to an expiration date. Either find out when your rewards expire or inquire about keeping your reward programs active.
Know Your Limits, Literally
You should avoid applying for multiple cards because they can cost more than what you save on a rewards program and financial companies may deny you a bonus or application if you’ve signed up within the last 48 months.
When it comes to credit cards, the best-case scenario is to find one card that provides you with a rewards system tailored to your lifestyle, without any outrageous annual fees with rules you can track and easily understand.