There is a plethora of credit card reward programs available to consumers. The idea of getting something back seems tantalizing, but smart and savvy consumers read the fine print and think about their purchases before making them.
Cash Back Reward Credit Cards
Cash back Rewards are appealing to many people because they are less restricted in how they use the reward. For example, a Gas Reward Card only rewards consumers with free gas, and an Airline Reward Card only rewards users with travel discounts. Cash back is more versatile.
Discover More Card is famous for its Cash back Reward Program.
- Users earn 5% cash back on certain purchases, such as in restaurants and certain home improvement stores
- Users earn 1% cash back on purchases that do not qualify for the 5% reward
- Discover has its own online shopping center in which users earn 5% up to 20% cash back.
Discover's exclusive online shopping site offers merchandise from "top retailers." That means that they are likely more expensive. It is possible that the same merchandise can be acquired for less money elsewhere, and a truly savvy shopper checks around first.
- Interest rates for balances after the grace period start at around 12% and go up from there depending upon the information given by the applicant.
- Spend $100, get $5 back. If the balance is not paid in full in less than a month's time, the the user pays at least another $12, bringing the cost of the item purchased for $100 up to $108.
- Unpaid balances continue to accrue interest.
With an interest rate much higher than the cashback rate, this card is beneficial if the balance is paid off in full every month.
LL Bean Reward Credit Card Visa Mastercard
LL Bean is a good example of a company that offers coupons for their merchandise as a reward for using their Visa or MasterCard. In addition, if users charge LL Bean merchandise to their LL Bean credit card they get free shipping, a savings of about $5 per purchase. At first blush, any fan of LL Bean's high quality clothing and travel accessories will think this is a fantastic idea.
Take a closer look:
- For every $100 charged to the LL Bean credit card, $1 in merchandise coupons are earned. Coupons are delivered in $10 increments, so credit card rewards users must spend $1,000 to get $10 off LL Bean merchandise.
- The coupons expire, so if LL Bean merchandise is not bought in time the reward is lost.
- Interest rates on the cards typically run as high as 29% APR and as low as 15%. The reward is earned at a rate of 10% (not including the free shipping).
- If the balance is not paid in full every month, then users pay more in interest than they earn in rewards.
For fans of LL Bean merchandise who pay their bill in full each month, the card offers nice perks.
People who are able to pay their bills in full each month may benefit from credit card rewards. Those who have trouble paying their bills each month should take a second look at the rules of the reward programs, and ask themselves if they really need to pay high interest rates for certain purchases.
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