Best Reward Credit Cards: Cash Rebate Programs and Incentives

The best reward credit cards allow consumers to enjoy a cash rebate on every-day purchases. Some credit card rewards schemes offer an across the board payment, but others provide a higher rebate for buying goods and services from a specific merchant. For example, the BP gas rewards card offers a rebate of 5 percent on all gasoline purchases from a BP station. Credit card reward cards provide an effective way to save money on planned purchases.

How to Qualify for the Best Reward Credit Cards

Rising default rates have resulted in the majority of lenders adjusting their eligibility criteria for credit card rewards programs. Liz Pulliam-Weston of MSN Money stated that: “Issuers have tightened their underwriting standards. That means you need to have FICO credit scores of at least 660 to qualify for most run-of-the-mill rewards cards. You have to have excellent scores — 750 or above — to get the best ones.” Applicants should also avoid making multiple applications as each search shows on a credit report for a period of 12-months.

Common Rebate Credit Card Mistakes

  • Unpaid debt. A number of consumers make the mistake of buying goods and services specifically to accrue rewards. This should be avoided as it is only prudent to use a credit card with cash back scheme to make planned – not impulse – purchases.
  • Minimum payment. Always settle the full balance at month end as interest payments will always exceed the benefits provided by cash back rewards schemes. The creditcards.com report revealed that the average APR on new card offers was 14.1 percent.
  • Offer expiration. Issuers are constantly changing their deals and they will expire if left unused. Ms Pulliam Weston points out that: “Because the deals are ever-changing, you should redeem your points or miles as quickly as you can.” Always check the terms and conditions of the best credit cards for rewards prior to signing-up in case they are time sensitive.
  • Deals constantly change. Offers can and will change so use comparison sites to make sure that the best rewards credit card has been selected. It is advisable to perform a check every 12 months as making too many applications can lead to a lower credit score.

Pros and Cons of the Best Credit Card for Rewards

The best rewards credit cards provide a way of making some extra cash on every-day purchases. The better credit card rewards schemes tend to offer higher rewards for making specific purchases from merchants, but it is important to assess personal spending habits before signing-up. Rebate credit card programs are not suitable for consumers who regularly carry an unpaid balance over to the next month as interest payments will outweigh any benefit that is accrued. An interest-free balance transfer provides a far better alternative.