A credit card not only provides the facility to spend now and pay later but it also gives you good reward points which can be redeemed to buy products, get discounts and gift vouchers.
There are different types of reward credit cards such as cashback rewards, flight rewards, shopping rewards and others. Since there are different reward card options select the best reward credit card according to your spending needs and lifestyle.
Here we give you five suggestions that you should consider before choosing a rewards credit card.
| Things to consider before choosing a Rewards Credit Card |
|---|
| Worth of reward points |
| Choose your interest |
| Annual fees |
| Rewards Points Expiry |
| Rewards Points Capped |
Worth of reward points
A general standard practice that is followed is 1 reward point for every 1 AED spent. But different credit card companies have different practices. Some credit cards have higher monetary value while others have a lower monetary value.
Redemption and earning the value of rewards are not the same. If you earn 100 points on spending AED 100 but while redemption the monetary value of 100 points will not be the same.
For example, if you spend AED 100 using a credit card you may earn three points or 2 points as provided by the card issuer. You have to accumulate these points and then redeem them for buying products.
Hence before you choose your credit card make sure that you have good knowledge of the worth of reward points.
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Choose your interest
Choose a reward credit card that matches your interest. You have to consider a credit card that gives you rewards for what you spend according to your interest. There is no point spending on that expense which does not give you reward points.
If you spend more on your travel and you do not get reward points then it is not the right credit card for you.
Based on your hobbies, lifestyle & interests, select rewards credit cards that give you the most when you spend on your interests.
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Annual fees
A credit card without annual fee has fewer reward points compared to a credit card with reward points. The annual fee is a little higher for reward credit cards, so when you choose a credit card make sure that you compare and consider the annual fee before selecting.
Rewards Points Expiry
Every credit card company provides reward points and there are different rules and regulations related to them. Find out the rewards credit card which does not have any expiry date.
Earning rewards points depends on your spending. You spend your hard earned money and achieve reward points. If reward points have an expiry and you do not redeem your points on time, it will lapse.
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Rewards Points Capped
Some credit card companies put a cap on reward points. After attaining a certain number you can’t earn reward points for a certain period. There may be a limit on annual points earning as well.
The credit card company may restrict your reward points for some reason. If reward points are capped then the value of rewards should be attractive. Hence choose a reward credit card which does not cap your rewards or the one that provides attractive offers.
About the author
Vinay Kumar Goguru is a finance professional with more than 8 years of diverse experience as a researcher, instructor and Industry work experience with both public and private entities. Prior to MyMoneySouq, he spent 6 years in Berkadia, It's a commercial mortgage banking company. He has a "Doctoral Degree in Commerce" and two master's degrees with a specialization in Finance, one as Master of Commerce and other as Master of Business Administration. He has written several articles on personal finance, published by different International journals. He loves traveling, reading and writing is his passion. He has a dream of writing a book on his favorite finance topics.
