Don’t Sign Up for a Credit Card Just for the Benefits

Whether it’s your e-mail inbox or physical mail box, you’re bound to receive more than your fair share of credit card offers every year. While it’s easy to just throw them in the paper shredder, we’ve all come across one or two that catch our eyes. With all of the great benefits many credit cards are offering these days, resisting the temptation to take advantage of one is all but impossible. However, signing up for a credit card just for its benefits or unique reward program is often the first step to putting yourself in debt. It just so happens that many of the best benefits are attached to cards with the highest interest rates. Despite any benefits that a card offers, your goal should always be to get lower rates. Here’s a look at some other important information that you should know about before signing up for a credit card reward program:

What You Should Know about Credit Card Benefits

• Although this holds true for any type of credit card, it’s especially important here that you at least attempt to pay off your card’s entire balance at the end of the month. Maintaining a large balance on your card will only lead to higher costs from interest rates that could eventually put you deep in debt.
• With credit cards that deal their benefits out in the form of points, such as frequent flier miles, it’s important to check the fine print for expiration dates. Some companies have restrictions that only allow points to be used within the year they were earned, so use them up before they go to waste.
• Did you know that many credit card companies place a cap or limit on the amount of rewards an individual can receive in any given month or year? Turns out that making all of your purchases on the same card just for the benefits may not be netting you quite as many points or rewards as you might think.
• Another reason not to get yourself to invested in credit card rewards is that their terms are always subject to change. If the credit card company discovers that their benefits program is bleeding money, they won’t hesitate to adjust it or eliminate it entirely. Also, more than a few prominent banks are struggling in today’s economy and should your card ever be taken over by a different bank, you can probably expect reward benefits to change.
• Do you have a credit card with a rewards program that you’re not really taking advantage of? Since these cards often have some of the highest interest rates, you might want to consider paying it off and moving on to greener pastures. They might not have all the glamorous benefits, but there should be plenty of other cards that allow you to get lower rates.