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Before You Choose a Rewards Credit Card

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Who doesn't like to get free stuff? What better way to get it than by doing something you do anyway - use your credit card. Rewards credit cards give you things like cash back and redeemable points each time you use your credit card.

Not all rewards credit cards are created equally. Here are some tips to help you choose the rewards credit card that will most benefit you.

What are the rewards?

Rewards come in different shapes and sizes. Some of the most common rewards are cash back or points that you can redeem for air travel, merchandise, and gift cards. The key is to choose rewards program that you can use. A travel rewards credit card is no use if you don't travel often. Cash is the most universal reward.

How much does the card cost?

Remember that credit cards have fees and interest rates. Reward credit cards usually have higher interest rates than other credit cards, but there are a few with relatively low interest rates. Annual fees are common with rewards credit cards. It's important to understand the fees and to make sure the cost don't outweigh the rewards you receive.

Is there a limit on the amount of rewards you can receive?

Ideally, you'd like to receive as many rewards as possible. Some credit cards might limit the rewards you can receive, even if you keep making credit card purchases. For example, you may only be able to earn a certain number of points or cash in a year.

Do earned rewards have an expiration date?

Some rewards credit cards expire your rewards if you don't use them within a certain period of time. You don't want to lose your hard-earned rewards before you have a chance to use them. Make sure you know the expiration date if there is one. Don't choose a card with an unreasonable expiration period.

What are your options for redeeming rewards?

Can you redeem the rewards at any time? Do you have to redeem them in increments? Restrictions or guidelines on redeeming your rewards can inconvenience you.

Is there a minimum spending limit to accumulate rewards?

You may have to charge a certain amount on your credit card before rewards start accumulating. If this is the case, make sure you don't have to charge more than you normally would just to get the rewards, especially if the card has a cost.

Can you exchange rewards with the card's partners?

Flexibility in how you can redeem your credit card is a plus. If the credit card has several different partners, you get more choices in redeeming the rewards you accumulate.

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