Rewards are a crucial part of our lives today due to the opportunities that cards can provide us. These are gift cards, cash back, insurance, etc. These cards allow us to gain a set amount of money by using other people’s money, etc. Rewards cards also play a central role in tax planning and that can be useful if you want to increase your tax budget without bringing into question the annual income of the charity that you wish to encourage. But how can you link your rewards to its economic value and impact whilst you make use of the card?
Rewards cards can be helpful in many instances if used correctly. Credit cards are a very convenient and powerful resource if used with justice. However, a credit card containing a rewards structure is a dangerous combination of rewards and risk. The way rewards work in practice is very different from what one would expect from a credit card.
Every time you spend money on your credit card you get a percentage back in return for spending on another. A much simpler system may look this: if you paid into a savings account, then you just returned that money to your cardholder. If, however, you spend cash on the card, then that money is returned to the holder of the savings account, and so on. The two things end up conflicting in practice, and if you go for a risky route it may actually backfire spectacularly as the money returned goes against your spending limit.
Rewards hold many important functions and must be handled with care if they are abused.
‘When using an credit card, if the issuer changes your balance to the highest interest rate you transfer that money to their new account. This may result in reduced spending limit and lower effective interest rate.
‘If you are making a purchase, but are not interested in using your rewards credit card, you will not be refunded until the card has spent the purchase. After almost fifteen months you will be getting one point for cash back, which is way lower than the amount that you spent on your credit card.
‘Rewards credit cards differ from cash advance cards. Therefore, if you put money into your bank account and that money was eventually turned over to a bank account, then it will earn you up to ten percent (20) on spending limit, but the cash back rate is much less, since the money was used for purchases made with another account instead of your bank’s own card account.
‘Reward credit cards are generally variable, meaning you can set the percentage rate from which the money will be converted to spending limit each time. This gives you additional variation when it comes to the rate of spending you receive. In simple terms, a variable percentage rate card works the same way as a rolling rate card, with varying percentages added continually until your given percentage rate.
Rewards credit cards are especially useful if you are doing credit card shopping or making use of rewards cards for your purchases. As a matter of fact, it is a fairly simple experience to accumulate points, receive points when they are used, and have an increase when they are taken from your card. Simple things like this make it a very efficient and sensible use of your credit card.
Rewards Credit Card: How To Get The Best Rates&Add Additional Options
How many credit cards can you qualify for? If you really think that is a big number, just multiply that by five or ten. There are some very expensive credit cards available, like the Discover Card, but you should try and get the best rate for your needs.
For starters, the American Express Blue, which is the best, lets you accumulate up to 12,500 points per dollar of purchase with no annual fee. Most times, you can only spend a total of $200 dollars and you will receive a long introductory introductory period. Then it all gets really intense and you start to overspend and end up paying quite a bit in interest. This is where the Chase Cash Plus Gold enables you to qualify for a huge percentage of your purchases at the end of the introductory period.
After you have gained enough points to qualify for the best available rate, they will let you start adding certain cards to your wallet. For example, they will let you transfer balances onto American Express Blue for a first come, first served. Then they will let you transfer your balances onto another Visa to get an instant credit card on the other major credit cards. These transactions can lower your monthly payments by as much as one-third or more on these cards.
Also, see if there are any additional offers available that you are prepared to shell out, but most credit card companies are very aggressive in this regard, and they will even throw in some extra fee to those who are best able to.