Credit Card Points and Other Rewards

Air miles, points towards paying for holidays, redemption points for a selection of high street shops, discounted merchandise from your favourite football club and many other rewards are available to credit card holders, if required.

Of course, such credit cards are designed to become your card of choice when buying goods and services, and if you are disciplined and organised then you can profit greatly from them but you must ensure that you pay off your balance every month. That is because, even with a credit card that carries a relatively low rate, once you start paying interest on carried forward balances any benefit you may attain from loyalty or reward points will be completely wiped out by interest charges.

The easiest way to ensure that you avoid paying interest is by setting up a direct debit to pay off the entire balance each month. Don’t be tempted to choose minimum payment on the basis that you will pay the difference manually; if you cannot afford to pay off the balance each and every month then do not opt for this kind of loyalty credit card.

Providing you pay off the balance, if you use such a loyalty card to pay for all your everyday purchases, you could accumulate hundreds or even thousands of pounds worth of benefits. As well as those that offer credit card points, there are other cards that offer cashback based on a fixed percentage of your total spend over the entire year. The benefit of such a card is that the reward is cash, which can be used to buy anything as opposed to loyalty schemes which restrict your redemption to a particular type of reward.

So, if you have decided that you are disciplined enough to manage a reward card the next step is to decide which is best for you. Some cards offer a bonus reward upon your first purchase with the card, or enhanced benefits for the first few months. Again ensure that you can pay off the entire balance each month before being tempted.

Paradoxically, cards offering flying miles are probably not the best option for those who travel regularly by air. That is because they will probably already be a member of a frequent flyer scheme and therefore collect air miles through that scheme. For them using a credit card that offers other benefits such as points to be redeemed in high street shops would be a better bet. Not only would they be able to have a wider choice of benefits, but they would be able to benefit significantly from their travels!

This article has been written for information and interest purposes only. The information contained within this article is the opinion of the author only, and should not be construed as advice or used to make financial decisions. Expert financial advice should always be sought and any links contained within this article are included for information purposes only.

Adam Singleton writes for a digital marketing agency. This article has been commissioned by a client of said agency. This article is not designed to promote, but should be considered professional content.

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