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Shopping4Cheap - Rewards Credit Cards |
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Credit Card Rewards Programs If you're like most people, you'll charge about $1,275 on your credit card this holiday season. What if you could get 1 percent back in cash? Or how about those $200 monthly gas station bills? What if you could pocket $10 every month to put toward your next tank? You'd take it, right? Of course. Welcome to the fast-growing world of reward credit cards -- 50 percent of all credit card offers this year had some sort of reward component, according to direct-mail tracker Mintel's Comperemedia: miles toward tickets, cash, discounts at retailers; some even help you save for college, just for using your card. Plus, most reward cards -- 80 percent -- come with no annual fee. "The industry has gotten so competitive that rewards are a key way to attract new customers," says Curtis Arnold, founder of CardRatings.com, which teaches consumers about credit cards. But here's the catch: Reward cards tend to carry a high annual percentage rate (APR). The typical reward-card APR is now about 14 percent, four points higher than the average credit card's, according to Robert McKinley, founder of CardWeb.com, a credit-card database. For that reason, sign up for a reward card only if you plan to pay off the balance each month. Otherwise, says Bankrate.com's Greg McBride, "the rewards are dwarfed by the interest costs attached to the card." The key to maximizing a rewards card is to read the fine print before
signing up. While many cards offer an interest rate of zero percent for
the first six months, it is important to find out what happens after
this period has elapsed, as the rates could increase dramatically.
-info courtesy of money magazine.
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