Are Credit Card Rewards Worth It?

Are Credit Card Rewards Worth It?

July 25, 2013         Written By Lynn Oldshue

If you do not have a rewards credit card, you may wonder why this kind of card is in such high demand. What’s so special about a rewards card? Isn’t it a hassle to manage? If you do not fully understand how these bonuses work, you may question whether these credit card rewards are worth it.

Here are a few reasons why you may want to put some time into earning those rewards.

Fee Recovery

If you have an annual fee on your card, your credit card rewards can help recover some of that expense. Can your rewards make up for your annual fee and still leave you with bonus points to enjoy? If the answer is no, you may want to consider getting another card. Otherwise, you’re literally paying money just to swipe plastic at the register.

Note that the money you get for your fee recovery may not be in cash. It could be in the form of store discounts or points you can use toward a purchase.

Bill Payments

If you get behind on your bills in a particular month, you may be able to use your cash back card to pay off a portion of your balance. Chances are you won’t be able to pay off the entire balance, but you may be able to at least make the minimum payment with these rewards. In emergency situations though, something like this can come in handy.

Some cards may not have a cash back feature to allow you to do this. If your rewards card only goes towards airline miles, you won’t be able to get any help paying your bills. This is why it is so important to choose the right credit card for your personal needs.

Store Discounts

Many rewards cards offer special store discounts, even if they are not affiliated with a specific store. You may get discounts when you shop online through the card’s retail website. Discover It offers up to 20% off purchases made through its online shopping mall in many leading stores. Discounts like these can quickly add up to extra cash in your pocket, if you use them correctly.

Self Satisfaction

At the very least, you can use a rewards program as a chance to challenge yourself to manage your money wisely. Some cards pay higher rewards on certain items during specific times of the year. You can make these purchases during these times to maximize your cash back rewards. As you see the rewards accumulate in your account, you will feel proud of what you have done and it may drive you to do even more.

Free Money

At the end of the day, think of credit card rewards as free money. If you are already going to be making the transaction, why not put it on your credit card and get something back from it. As long as you pay off the balance in full on time each month, you will be able to benefit from money you were already going to spend.

Are credit card rewards worth it? You bet they are! But only if you are financially responsible with the card. Find the best rewards credit card you, use it wisely and enjoy the perks.

The information contained within this article was accurate as of July 25, 2013. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


About Lynn Oldshue

Lynn Oldshue has written personal finance stories for for twelve years. She majored in public relations at Mississippi State University.
View all posts by Lynn Oldshue