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7 Things That Make a Rewards Credit Card Unrewarding

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The point of having a rewards credit card is to get a tangible benefit from using your card - points, miles, cashback, discounts, etc. However, there's no point in keeping a rewards cards that costs you more than it benefits you. Here are some things that make a rewards credit card unrewarding.

1. Rewards you can't or won't use

What good are travel rewards if you never go further than the next town? Rewards for stores where you don’t shop and restaurants that you don’t eat are no good. When you pick a rewards credit card, make sure the rewards are some that you'll actually use. Cash back rewards are usually a good choice since you can always use cash. Or in the case of cash rewards redeemed as a statement credit, you can reduce your credit card balance.

2. Rewards that cost more than they benefit

Many rewards credit cards have annual fees and other kinds of fees that make the cost of the card high. If the value of the rewards you receive isn’t more than the fees you have to pay, the card isn’t worth the cost. Close the credit card, save the fees, and use that money to reward yourself.

3. Limited rewards that end no matter how much you spend

Some rewards cards will only reward you on a certain amount of purchases. Any purchases after that amount receive no reward at all. But, that's no good if you're a heavy spender. Your card shouldn't stop rewarding you if you keep spending.

4. Rewards that expire before you can use them

If your rewards have a short expiration date, you might not get a chance to use them. The rewards don’t have to last forever, but you should have a reasonable amount of time to use them before they go away. Don't expect your creditor to warn you about expiring rewards. It's up to you to know the expiration date and use your rewards while you can.

5. Rewards with limited options for redemption

Some credit cards limit your options for redeeming rewards, like requiring you to use rewards on certain dates (or restricting certain dates) or in certain increments (like $50). Too many restrictions on your rewards can make it difficult and nearly impossible to use them. You may be able to comfortably spend your rewards within those limits. However, if that’s not the case, it might benefit you to look for another, less restrictive rewards card.

6. Minimum spending limits to accumulate rewards

There are rewards credit cards that don’t start accumulating your rewards until your purchases reach a certain amount. Depending on that minimum amount and how much you use your credit card, you may only receive little or no rewards. These kinds of restrictions can encourage bad spending habits like overspending, especially if you're led to charge more than you can afford just to get rewards.

7. Rewards that encourage debt

A rewards card can easily lead you to debt when you have to charge things you ordinarily wouldn’t just to accumulate rewards. For example, some rewards credit cards only let you rack up points when you use the card toward ordinary purchases like groceries or gas. Since you can possibly spend hundreds each month on these items, it’s crucial that you watch your spending and payment habits to keep from going into debt.

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