Benefits of a Rewards Credit Card
With a variety of available credit cards, how do you know which is right for you? Each card offers unique rates, fees and benefits. If you’re looking to get extra perks while building credit, consider a rewards credit card, like the VISA Platinum Rewards Card from Piedmont Advantage Credit Union.
Some of the most popular cards nowadays let you pile up points with every purchase and redeem them for airplane miles, hotel stays, electronics and more. Are these cards good deals? They can be. There are several factors to consider, including your credit score, buying habits and ability to read the fine print to understand the nuances of the offers.
How Does It Work?
When selecting a rewards card, be sure to research the rates and fees associated with each option. As with any credit card, make sure you have the funds to aggressively pay down your balance and avoid racking up debt. Smart spending and money management habits let you enjoy the benefits of a rewards card while maintaining a level of financial responsibility.
Most rewards credit cards come with large welcome offers, which can be advantageous if you pay off your balance every month. Some also have rotating promotional periods. For example, one month you might earn 3x points on one type of purchase, but only 1x points on another. If you have one of these cards, pay attention to changing offers to make the most of your rewards.
With the Piedmont Advantage VISA Platinum Rewards card, you’ll earn points for every qualifying purchase, then turn those points into merchandise, travel or experience rewards through the VISA ScoreCard Rewards program. You can cash in your points for things like name-brand products, home appliances and furnishings, technology, vacation packages and gas. This card offers a competitive rate and no annual fee.
Which Card Is Right for Me?
A rewards card can be a great option, but be sure to do your research first to understand all the pros and cons. Consider the following factors to help you find the best rewards credit card for you.
- Credit Score:The rates and rewards available to you will often depend on your credit score. This impacts your eligibility for certain rewards cards and the APR for which you qualify. Credit scores are calculated based on a variety of factors, including payment history, debt, the kind of credit you’ve had and for how long, and any recent “hard” credit checks, which occur when you apply for a loan or credit card. The Piedmont Advantage VISA Platinum Rewards card offers a non-variable introductory rate of 3.90% APR, then a non-variable rate ranging from 10.90% to 15.90% based on creditworthiness. Piedmont Advantage Credit Union can help you learn your credit score and offer advice on how to improve it. You can also receive a free credit report through online services like Credit Karma.
- Monthly Payment: You’ll benefit most from a rewards card if you can pay your credit card bill in full every month. Even with cards that have competitive rates, carrying a sizable balance means you’ll end up with significant interest payments. Be sure the rewards card you select is one you can use for everyday expenses and pay off at the end of the month or billing cycle.
- Spending Habits: As with any credit card, rewards cards work best when you make wise purchasing decisions. Review your monthly purchases to understand where you spend the most money, especially on recurring charges like groceries and gas. You’ll want to choose a rewards card that offers points or discounts on those categories. But be careful not to overspend for the sake of earning more rewards—this could cause you to run up big balances on impulse buys.
- Other Perks:Though rewards may be your priority, consider the additional benefits of various cards. These may include special access to events, fraud and identity theft protection, extended warranties on purchases, free roadside assistance and lost luggage reimbursement.
- Minimum Thresholds: With many cards, you must reach a minimum threshold before you can redeem your rewards. This means you need to spend a certain amount or accrue a certain number of points for rewards to become available. Policies vary, so check the details of your card so you know what to expect.
- Sign-On Bonuses: Some cards offer sign-on bonuses of several hundred points. While great incentives, these bonus points may only be available if you spend a certain amount during the introductory period. Spending a lot at once can drive up your balance and lead to higher interest payments.
- Fees:Like other credit cards, some rewards cards charge annual fees. Crunch the numbers to make sure the rewards outweigh the fees. It’s also worth investigating how much certain cards charge for balance transfers, late payments and foreign transaction fees. The Piedmont Advantage VISA Platinum Rewards card charges no annual fees or balance transfer fees.
A rewards credit card can be an excellent option to earn incentives for purchases you’re already making. Contact Piedmont Advantage Credit Union or visit one of our North Carolina branches for help finding the right card for you.