2 June 2008 by Mark (no comments)
- Are You Suitable: Gold and platinum cards usually only suit those with an above average spending. So, unless you pay the balance of your credit card bill outright every month then avoid a card with a rewards program. If you ever pay interest then you’re far better off having a credit card with a low ongoing interest rate. If you only spend around $1000 or less a month on a card, there’s not much value to be gained in rewards programs. Typically you’d pay more in annual fees than you would earn in rewards.
- Legitimate Reason: A credit card with a rewards scheme is all fair and dandy but look for a card that gives you suitable rewards for your needs. Ask, are there any rewards which you would find really beneficial? Do you want shopping or travel rewards? If you wanted travel perks, do you even have the time to take an extra holiday? etc.
- Points Capping: Apply for a rewards credit card that does not put a limit on the points you can earn per month. Reaching that limit can be all to easy when you make a few large purchases in a month. After that your points will be maxed out.
- Big Spending: Gold and platinum cards usually have high annual fees, sometimes as high as $400. Therefore, cards like these are are only suitable and worthwhile if you spend a large amount per month, such as $5000 or more. So you see that big spending is needed per month along with the ability to be able pay it off each month.
- Possibly Ideal For Small Business: I’ve got three points to make on the idea of using a rewards card in business. Provided that you spend a considerable amount on the card per month it could be a legit purpose for a gold or platinum card. So, realistically if you were to spend around $5000 per month on goods and services you’d be able to rack up some decent perks. Bear in mind, you must be sure you can and will pay off the balance each-and-every month to make it worthwhile otherwise you’ll be getting hammered by the high interest rates. Lastly, you must apply the same discipline to a business credit card as you would to your personal credit card… that is, do not spend beyond your means!
