Saturday, February 4, 2012

Rewards Credit Cards- Are they really worth it?





Credit card companies lure the customers with their attractive offers and rewards which sound pleasing to the customer than the card plan itself. Customers tend to fall for these things and the companies know it very well. As some of these offers suit certain people well, it is not for everyone and they should know that rewards are not what you must base your decision on while choosing your credit card.

There is a general misconception that only people with a very high pay grade will be issued credit cards. The company is ready to give credit cards to anyone with a steady salary and an ability to pay back regularly. Nowadays, a person with a minimum salary can avail credit cards and enjoy its benefits. But the credit limit will vary significantly among the users.

You cannot expect someone who earns 10,000 per month to have the same credit limit as someone who earns 50,000 per month. The credit card companies need to ensure whether the customer has the ability to pay the money back before they can issue him the card. However if someone is regular in paying back the dues, then the company attains confidence on him and they can even increase his credit limit. These cards are really useful to someone who is regular in paying back his debts.

Rewards credit card offers

The companies always want more customers on their side and they adapt many strategies to increase the number of people opting for their company. One of these is the concept of credit card offers. These offers act as incentives to the customer who is using the company’s card for a long time. He is offered a reward of some kind in return to his loyalty to the company.

These rewards include discounts in tickets, gift certificates and coupons to restaurants in the localities. This is the most successful strategy in attracting customers as they tend to go for the company which gives them the best credit card offers. The company does not lose much by offering them these rewards but stands to gain a lot of profit by the increasing number of customers.

However, one must not base their decision of credit cards on the rewards offered by them. For example, some company may offer great rewards on airline tickets but imposes a huge rate of interest. This may be a good option for someone who is always on the move but it is not for everyone. While choosing your card, you must look at the card plan and base your decisions on that instead of the rewards offered by the company.

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