There are credit card rewards that range from cash back to hotel credits to airline miles to zero percent APR. But sometimes the rewards you earn with a credit card are more than offset by annual fees and interest charges. In many cases, choosing the card with the lowest APR and the lowest annual fee that you qualify for will be more “rewarding” than getting airline miles or other goodies.

If you choose a rewards credit card, then take the time to read the tiny print to know what your limitations are. For example, with airline miles reward programs, there may be dates you’re not allowed to buy tickets for (blackout dates), or restrictions on what class of ticket you can redeem your miles for.

Cash back reward cards are very popular. For people who spend a lot, yet pay off their balances in full every month, they can bring in a tidy sum over the period of a year. But those who carry balances are almost always better off choosing the lowest interest rate card.

Retail reward credit cards work well if you often shop at a participating retailer, like Walmart. The Walmart credit card gives you a 3-cent per gallon discount on gasoline at Walmart gas stations. Other retail reward cards earn you “points” towards discounts or free merchandise. There are retail reward cards for online spending too, including cards for Amazon.com and Overstock.com. Like with the other reward cards, you should read the details and find out if you would actually benefit from the rewards, or if fees and interest would counteract them.

If you’re not sure whether you would be better off with a low interest rate card or an airline miles reward card, then you can go to www.creditcards.com where you can input your card specifics, monthly balances, and estimated monthly payments and find out.

Another type of “reward” program doesn’t benefit you directly but benefits a charity close to your heart. For example, the American Society for the Prevention of Cruelty to Animals (ASPCA) offers a credit card that donates a certain percentage of purchases to the ASPCA. There are also cards associated with educational funding and with the American Heart Association, among others. These cards sometimes make a fixed donation of, say, $10 or $20 to the charity with which they are affiliated when you open the account.

There are rewards credit cards for many different tastes and needs. Used properly, they can help you put a little money back in your own pocket, or into the pockets of those less fortunate.

When shopping around and comparing potential credit card accounts, rewards should not be the only criteria you use to select a credit card. You need to read the credit card contract (cardholder agreement) before applying for a credit card to discover traps that often negate any potential benefits from rewards programs. These traps are usually hidden in the small print, but their impact on your finances can be huge.

Universal Default

Over 40% of credit card banks use “Universal Default” to increase the interest rate of their cardholders. Basically, if you are late paying any credit account, the credit card issuer uses this ding on your credit report to justify raising your interest rate – even if you were never late paying the credit card bill. A typical Universal Default APR is 27.9% or higher. You should not apply for a credit card that includes a Universal Default clause – no matter how nice of a rewards program they offer.

Two-Cycle Billing

Credit card companies are starting to charge interest on balances in groups of two-months. So, if you have a $500 balance one month and pay it off the next month, the credit card issuer will still charge you interest during the month you had no balance because you had a balance the previous month. You should avoid any credit card with two-cycle billing.

Musical Due Dates

You should look into or ask the credit card issuer about their due date policies. Sometimes, credit card issuers will shave a few days off a due date after you are a customer for a while. They send a “terms update notification” (which most cardholders do not read because it comes in the mail and may look like another credit card solicitation). What this does is lure cardholders into paying by a certain date, and then change the terms so the payment is due a few days earlier – which usually results in the cardholder unwittingly paying late. The reason for this is once a payment is late, the card company raises the cardholder’s interest rate to the “default” APR and charges a late fee. A typical default APR is 29.9% or higher and a typical late fee can be as high as $39. Other due-date tricks include setting due dates on weekends or requiring payment before noon on the due date, which essentially pushed the due date back one day.

Vanishing Grace Periods

Traditionally, a balance will only incur a finance charge if the cardholder carries a balance past the due date of their billing period. However, some card issuers are completely erasing their grace periods. This means that interest charges start the second a purchase is made on the card. Avoid cards with no grace period.

Holding Payment and Musical Payment Addresses

Some credit card companies will hold your payment for up-to 5 days if you pay by check and fail to use their envelope or write any requested information in the memo section of your check. They do this to make payments late, and then change APRs to their default APR (29.9% or higher). Some card issuers will even change the address they want you to send your payment in an effort to delay your payment (and causing a “late payment” default and APR increase).

So, when you apply for a credit card, please keep all these factors in mind and be sure to read the credit card contract before applying. Be sure to shop around and compare credit card offers before applying. Several websites, such as creditcards.com, cardratings.com, cardweb.com and bankrate.com offer comparison charts from which you can compare different credit card offers. If you are set on getting an awards card, shopping.yahoo.com has a credit card section that list different types of rewards cards for you to compare.

When you are in the market for a new credit card, the features you have to choose from may draw you to the card.  Low interest rates and the types of rewards you can get, are what draw many to reward credit cards.  Those of you who have good credit, will more than likely be able to get reward cards that boast 0% APR.  This does have an introductory period, normally 1 year, that goes along with your new reward card.

You’ll also need to think about the type of card that best fits your lifestyle.  The credit card field is very competitive, meaning that you always have a lot of offers to choose from.  Reward cards and becoming very popular, with more and more coming out all the time.  If you look for your reward credit card on the Internet, you’ll be able to compare hundreds and hundreds of offers – and decide which one is indeed the best for you.

Those of you who travel on a frequent basis, may find frequent flyer reward cards to be very beneficial.  These credit cards will accumulate either points or miles for every dollar that you spend.  You can then use the accumulated points or miles and redeem them for airline travel, hotel reservations, car rentals, and even cruises.  These credit cards can also help you with discounts as well, which can make a vacation or business trip more affordable than ever.

If you like to pay your full balance at the end of every month, then you may find a reward credit card with a cash back feature to be the most enticing.  There are some cards that offer cash rewards of up to 5%, which can equal quite a bit at the end of the year.  All you need to do with cash back reward credit cards is make a purchase, and you’ll get money back for everything you buy.

Other types of reward credit cards include discounts on gas purchases, contributions to your savings account, and points that you can redeem for great items and things of that nature.  No matter what your lifestyle may be, you can almost always find a reward credit card that fits your needs and interests.  Reward credit cards are great to have, as you can buy the things you need and earn points, flyer miles, and even cash back.

If the sound of rewards with your credit card purchases sounds enticing, you should look into getting a reward credit card.  These cards are great to have, as most include low APR with great reward incentives.  They can save you money as well, which is great for those on a budget.  With a reward credit card – no matter what you choose you’ll come out a winner.

Two good sites to search for credit cards are CreditCards.com and ConsumerCardReport.com. ConsumerCardReport.com specializes in providing insightful guidance to consumers. CreditCards.com lists the most offers, but none of the extra cards seemed worth recommending.

There are a few fairly simple precautions that consumers should take when using rewards cards:

1. Pay it off each month. The interest rate on rewards cards is usually higher than on other credit cards, so make sure you pay the balance in full every month.

2. Avoid late fees. These can be as high as $39, so make it a habit to pay the credit card bill soon after receiving it — don’t procrastinate.

3. Don’t overuse it. Some people are tempted to buy more stuff with their rewards card in order to increase their rebate, which can pile up unnecessary expenses. If you don’t think you can control your spending, don’t get the card! Some rewards cards will pay you a higher percentage as you spend more money, for example a card may pay 0.5% for the first $5,000 you spend and 1.5% afterwards. This encourages excessive credit card spending, which is why we don’t recommend such cards to most people.

4. Make few applications. If you apply for one credit card your credit score will be fine, but as you apply for more cards lenders become more concerned that you may be having money problems. So the more cards you have applied for in the previous six months, the more your credit score will be decreased. After six months, your credit score returns to normal. Our recommendation for most consumers is to make no more than two card applications; but if you plan to get a mortgage or major loan in the next six months, make only one application.

Be aware that the number of credit cards you actually possess won’t harm your credit score. More cards may even improve your credit score by increasing your credit-to-debt ratio. In particular, it’s wise to maintain your card balances at less than half of your spending limits for those cards.

5. Check the terms. The most reliable description of a card’s terms is listed alongside the card application. Although terms can sometimes change, major changes are usually rare.

While the best ways to save money will always involve old fashioned cost-cutting, obtaining a rewards credit card is still a good way to give yourself a virtual raise.

www.creditcardcredit.net – The Chase Free Cash Rewards Visa Card offers you the chance to earn cash back rebates for your everyday purchases. Through the rewards program, you’ll earn one point for every dollar you spend. You’ll also receive 1,000 bonus points after your first purchase. After earning 2,500 points, you can choose to receive either a $25 check or a $25 gift certificate to participating brand-name merchants. The amount of points you can earn is limited to 60,000 points per year. This card has a reasonable interest rate for purchases and balance transfers with no annual fee, and it does offer an interest-free introductory period for both purchases and balance transfers for up to the first twelve billing cycles. Standard platinum benefits and services are also provided. – www.creditcardcredit.net -

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Credit card companies are cutting back on reward programs as times get tough.

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