Rewards Credit Cards: Are They Worth It?

With so many options of credit cards on the market we need to look for the right one that gives us some type of advantage, and for that matter companies created the rewards credit cards.

They have a lot of different terms and offer some type of reward to the owner, but are they a good option to have in your wallet? The question that echoes in the minds of many potential cardholders is: Are rewards credit cards truly worth it?

That’s what we’ll discover today!

What are rewards credit cards?

Rewards credit cards are a category of credit cards that provide users with various incentives or “rewards” as a benefit for utilizing the card to make purchases.

These rewards can take the form of cash back, points, miles, or other perks, creating an additional value for cardholders beyond the simple act of spending.

The goal is to encourage cardholders to use the credit card for their everyday spending and, in return, earn valuable benefits.

And when looking for a credit card to apply you can find different types of rewards credit cards available, every single one of them has an unique rewards program or set of benefits.

Are these cards worth it?

And if you want to know if rewards credit cards are worth it we need to take a lot of things into consideration, starting with the types of rewards you want. Make a list and categorize what it’s your priority and what it would be nice but isn’t a necessity.

Rewards credit cards can be worth it for many individuals, but it depends on your spending habits, financial discipline, and the specific rewards offered by the card.

Depending on the provider you can estimate the value of the rewards, so how much they are worth and if the redeem it’s easy or not.

You’ll also need to discover the annual fee the card has, and if it’s with it considering how much you want to use the card and if it’s okay to pay this fee if you don’t spend enough.

The majority of these cards have interest rates that can be high depending on your balance of each month and other conditions, so you need to see if this is something you want to deal with.

And of course we can forget to mention about your spending habits, especially because the rewards credit cards programs work based on how much money you are spending.

If you use your credit cards with frequency probably it’ll be worth it to choose one that works with a reward program.

Types of rewards in credit cards

Now that you are aware of how to identify if the rewards credit cards are worth it for you or not, we can talk about the types of rewards you can have in a credit card benefit program.

Cashback

Cashback is the process where the owner of the credit card earns a percentage of their purchases back in cash, usually it can be deposited on your account or used in future purchases like some kind of discount.

Some cashback cards have tiered systems where higher percentages are earned in specific spending categories. For instance, a card might offer 3% cashback on dining and 2% on groceries.

Points

Some types of rewards on credit cards can be points, they accumulate based on how much you are spending, the more money you spend the more points you gain.

Usually the points can be earned for every dollar spent, but some programs can make a checkpoint, where you receive one point to every $10 dollars, or something similar.

The points can be used to trade for products, gift cards, miles, statement credits, discounts and much more.

Miles

These are the favorites of every one, they are very similar to points and you’ll earn miles to every dollar you spend.

The miles can be traded for airplane tickets, hotel stays, car rentals and other travel related expenses, which make your trip much more fun and cheaper.

These are just some types of rewards you can find using credit cards rewards programs to gain some type of advantage.

When choosing a credit card, it’s essential to consider the specific rewards offered, redemption options, any associated fees, and how well they align with your spending habits and preferences.