Get a Good Rewards Card!

Hello again world!

So, today I want to talk about Rewards Credit Cards. 

The first thing that needs to be said on this is DO NOT PUT ANYTHING ON CREDIT THAT YOU CAN'T IMMEDIATELY PAY OFF!!!!!!! Can not stress this enough. Any credit card you get, no matter how high the limit, is NOT found money. You will have to pay this back and then some!

Anyways, not yelling at anyone, just throwing the information out there with a passion. I, like many others before me, have fallen pit to this. Impulse control is a huge thing when dealing with credit cards. Just because something is a great deal and you have a high credit limit, doesn't mean that you need to buy it. 

Time to step off my credit card soap box and actually get down to the nitty gritty!

If you are wanting to travel, and travel regularly, a Rewards Credit Card is a must. I'm not going to get into specific cards here, because as a Canadian the cards I have access to are very different then the ones someone from another country would have. The main focus of this post is going to be on what to look for in a Rewards Credit Card.

The first question, which will marginally narrow your search, is what kind of rewards are you looking for? This may seem silly, but man are there a lot of options out there! Anyways, since you are here and reading this, you are probably looking for something that will pay out with some awesome travel opportunities. I know I am!

You want a travel card... Now what?

1. How many points will I get per $?

If you are already struggling to afford travelling, chances are a card or rewards program that will only pay out when you book on a specific airline or hotel chain is completely useless. Make sure that they will give you points for your day to day spending. It might be considerably less than what you would get if you were to book a flight, but every little bit counts.

That being said, always check the amount of points you get for each specific purpose. For example, if you found a card that gives you 1 point for every $100 you spend. Unless you are a big spender (unlikely if you're here reading this), you aren't going to get anywhere for a very long time. 

Or, if you are doing a cash-back option to put in a fund to travel later, you need to know the percentage the company will give you back. In this case, watch for laddering. Some cards will advertise a 5% cash-back, but the goods are in the fine print. 1% until you spend $1000 dollars with the card, 2% until you spend $2,500 with the card, and so on and so forth. Going this way it can take a very long time to get up to the 5%, and you might want to look elsewhere.

2. How many points does it take to get anywhere?

This one pertains to point cards specifically. If a card were to offer you 10 points per dollar spent, your first instinct might be to jump on it. But wait! How many points do they require to actually get anywhere? If you are planning on, say, a flight to somewhere three hours away and it costs you 100,000 points is there really any form of deal here? I'm exaggerating slightly for ease of  calculations, but there are similar scenarios out there. 

Personally, with a card that I used to have, after running it to the max and paying it off a few times, I found the rewards program on it. Now, theoretically, I should have enough to get something good right? NOPE! My thousands of dollars spent only got me a $50 gift certificate to a bookstore. With all that money wasted, I could have taken myself somewhere very nice.

3. Are there any blackout dates?

Is there really a use to accumulating lots of points to go somewhere amazing if you can hardly ever use them? Is there really a point in spending your hard earned money on a tropical vacation in the middle of summer at home? No! A few blackout days aren't unheard of, but some will obviously over-do it. This is a tricky little thing that you may have to delve into the fine print for.

4. Are there any fees?

Unless you make an executive salary, in which case you are most likely not a broke DINK, chances are you won't qualify for an executive/gold/1st class/whatever the heck you want to call it card. This can be disappointing at first, because they always have the better rewards programs, but there is a silver lining to this dark and rainy cloud.

The annual fees are ridiculous! Unless you plan on using your card a ridiculous amount and racking up your spending (remember my earlier warnings here!), these cards are often not worth the ridiculous fees that you have to pay for them. And that's if you qualify. However, some "normal people" credit cards are also starting to come out with annual fees, so be careful! If a card seems a little too good to be true, look into this to avoid a lot of heartache and even more debt down the road.

5. What kind of purchases are getting you points?

I briefly mentioned this before, but it's super important so I'm going at it again. There is no point in getting a travel rewards card, from a certain airline for example, that will only give you points if you buy with them. If we could afford to buy the airline tickets right from the airline itself, the rewards card would be a nice benefit, not a necessity.

No, we need a card that will also give decent points on purchases that we make every day (that we pay back right away of course). This is why reading all that tiny fine print is so important. The fine print will tell you all you need to know about the points you'll actually be getting with your new card.

So... Despite all the pitfalls and unknowns of credit cards, with all of the proper research they can be very helpful for getting you on your way to somewhere else! Got any tips or tricks when it comes to Rewards Credit Cards that I missed? Throw them in the comments and let the rest of the world know! We're all in this together!

Tune in again next Monday morning for more travel tips and tales on a budget from your favourite broke and globetrotting DINK!