Looking to open a new credit cards that lets you earn rewards? It might take you a while to comb through your options: There are countless types of reward systems, from simple cash back, to airline miles and hotel stays, to points that can be redeemed for all kinds of gift cards and goodies.
If you use them strategically, you can maximize the financial benefits of these reward-based cards and achieve your goals faster. Below, seven experts from Forbes Finance Council share some important considerations when “shopping” for a reward card.
1. Changing Reward Structures
Always understand how the rewards change on a quarterly basis and how that affects your ability to earn points. It takes some time to fully understand how to maximize rewards, but once you’ve taken the time to do so, you can be extremely effective in earning rewards across most of your daily expenses. For example, which of your three cards currently pays the highest bonus on groceries or gas? – Drew Gurley, Redbird Advisors
2. The Credit Cards Net Benefits
Credit cards reward come in many shapes and forms. Points, cash back, free gifts and a combination of the above can all be part of this offering. The most important consideration for consumers is to evaluate the net benefits of the different credit cards while keeping in mind that the benefits also depend on how they will use them. – Atish Davda, EquityZen
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3. Your Lifestyle
Look for a rewards program that fits your lifestyle, in both how points are earned and redeemed. For strategic high spenders, value-per-point should be the main decision driver. For instant gratifiers, nontangible benefits, like convenience, should be more considered. Needs and lifestyle change over time, so prioritize cards with flexible earning schemes and a variety of redemption options. – Wei Ke, Simon-Kucher & Partners
4. Value Of Points Per Dollar
One of the misconceptions is the value of points per dollar spent. Points don’t transfer equally with all airlines, travel or related vendors, as the allegiance might be toward a preferred vendor. Though cash back and mile rewards can be tempting, don’t get caught in a spending spree trying to get “free” travel as bait. Also, annual fees vary, with many waiving them for the first year as a teaser. – Sina Azari, Present Financial Partners
5. Control Over How You Use The Reward Credit Cards
I personally prefer cash back because I know how much I am receiving and I choose when and how to spend or save the cash. That’s not to say that travel and lifestyle benefits can’t be more cost-effective for someone who frequently goes on business trips and can utilize a specific card that’s tailored to frequent dining out and travel. – David Miller, PeachCap Inc.
6. Security And Fraud Protection
I think people are often blinded by the rewards and offers from modern credit cards. It’s important to consider the amenities available to you in terms of security and fraud protection. Make sure you are safe. We are in the age of digital payments and it’s great, but you must make sure that you are working with a provider that protects you 100%. – Andy Khawaja, Allied Wallet
7. The Fine Print
There are always rules, time limits, minimum spends or limits on qualifying purchases that people don’t take into consideration when enrolling into a rewards card. Getting 3% cash back on purchases is great, but is it on all purchases or just gas and groceries? Is it on all groceries or all gas stations? Don’t forget too that if you cancel the card, you likely lose all the rewards you’ve earned.