Do Reward Points Really Reward

In an effort to overcome the competitive nature of the credit card market, credit lenders are turning to offering reward programs to gain an edge over their competitors. Countless types of reward programs exist, and credit lenders are offering cash back for purchases, airline “frequent flyer” miles, cruises, luggage, and points that can be used to purchase merchandise from specific stores are some of the more popular forms of credit card reward programs.

Often, cards will offer you reward points for every specific amount of money spent using the card. You can accumulate the points, and then when you have enough for the trip or cash back that you’re “saving” for, you cash them in. The theory of reward points is excellent, it’s like a bonus- you are going to use your credit card to make purchases, so why not earn something for the purchases you have to make anyway? There are a few loopholes in reward point programs, and some fine details that you should research thoroughly and take into consideration when choosing a credit card based on the rewards programs the lender is offering.

First, the reward points can change in value. It’s similar to a credit card company changing their interest rates- all the lender needs to do is notify the cardholders of the change and give sufficient notice before the changes take effect. If you are planning to use your reward points for a vacation, or to purchase airline tickets, don’t be surprised if by the time you have enough points to cash in the points don’t have enough value. You’ll need to keep a close watch on each of the “changes in credit card agreement” notices that come in the mail, as the details of your reward points programs can be found within them, and if changes are to take effect, you’ll learn about it in those documents.

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