It seems like there are as many credit card reward programs as there are grains of sand on the beach. If used correctly, savvy shoppers can use rewards to save on purchases and to redeem perks like cash back or airline tickets.
It’s not all perks and savings. Cards with loyalty programs can include higher interest rates and annual fees, restrictions on using rewards and other pitfalls. As with all financial decisions, careful planning and research can help you take advantage of rewards and avoid costly mistakes.
If you’re in the market for a card with a loyalty program, consider these quick tips before making a decision:
- Because of their higher interest rates and fees, credit cards with loyalty programs are best suited for those who pay off their balance each month.
- Make sure the program offers rewards on things you’re interested in and will use.
- Choose a card that offers rewards in line with how you already shop.
- Avoid programs that require you to buy more or spend more on items you typically wouldn’t buy.
- Always read the fine print and understand the fees and potential costs associated with your new card.
One way to use your credit cards to your advantage is to stack them in your favor. If you’re not able to pay your balance off each month on your rewards cards, which tend to have higher interest rates, you can transfer your balance to the VERMONT Platinum Card and pay an affordable interest rate. There are no balance transfer fees so you can spend for the rewards, and transfer for the savings. Plus, the VERMONT Platinum Card is the only credit card that rewards members with a lower interest rate when you choose to buy local and support Vermont businesses.