A lot of people like credit cards because they get freebies, they can build their credit, and they are promised everything under the sun. You can get free flights, free hotel stays, and discounts at your favorite stores. However, sometimes you have to spend a lot of money just to get these perks. With most credit cards, you have to spend more than just a few dollars to get the rewards or they are meaningless.
When you should sign up for a credit card:
1. When you get a discount on purchases because of cash back.
If you do not want the flights or the hotels, you can still get a lot of value from credit card rewards. Some cards will offer you as much as 2% cash back. Depending on the card, sometimes you can get 5% cash back on a variety of purchases. If these higher cash back amounts are on something that you like to purchase or need to purchase anyway, it is well worth it to get that credit card.
2. When you need airline miles
If you fly often or want to take a specific trip, you should look into the dollar to mile exchange rate. Look for cards that offer one mile for each dollar spent, or credit cards that offer you a huge sign-up bonus that you know you qualify for and can meet the spending minimum. Note that this only works for a credit card you intend to use and pay off frequently; otherwise you will be spending thousands of dollars on a plane ticket that could have only cost you hundreds. Another great thing about earning miles is that if you don’t get to travel, you can sell your miles for cash or redeem them for other rewards.
3. When You are Smart About Redeeming Rewards
Many people just try to gain rewards as quickly as they can, but that is not always the best approach. The secret is to find the best way to redeem them. Sometimes companies will allow participants to redeem them for a penny or less toward gift certificates or other merchandise. But if you are really looking for deals, sometimes you can find them on last minute travel deals.
4. When You Treat Credit Cards Like Cash
Many people do not really think about their credit card being like cash, but it really is. You should never use a credit card in place of cash, but simply use it because it is convenient. Think about your purchases before you make them, or you could be in for a world of trouble. Many people use their credit cards without keeping track and end up spending more than they can afford to pay off.
When it comes to deciding if a rewards credit is right for you, these are just some things to think about. If you decide to get one, make sure you read the fineprint to make sure the one you decide on is the right fit for your needs.
