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Reward Cards 101

What to Look Out For

Qualifying for a rewards credit card generally depends on having a good credit score. If your credit score needs improvement, you may have a harder time getting approved for a rewards credit card.2

Rewards cards may have higher costs than other credit cards. For example, annual fees are common with rewards cards, sometimes even more than $500 per year for higher-tier rewards.3

Not only that, rewards cards often have higher interest rates than other credit cards, which means you shouldn’t carry a balance on a rewards card.

There may be stipulations for earning rewards buried in the fine print of your credit card terms. For example, a program may advertise 5% cash rewards, but there may be a limit on the rewards you can earn at a higher rate. Restrictions, caps, or minimum redemption amounts can make it difficult to redeem your rewards.

Credit card issuers might change their rewards programs without warning, so make sure you read everything that comes with your billing statement.

Not all rewards are forever. Some reward programs expire your rewards if you don’t use them within a certain amount of time. The best reward programs don’t let your rewards expire, but most programs will forfeit your rewards if you fall behind on your credit card payments.

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