Credit card rewards are an often profitable way to earn a little extra from the purchases you make on your credit card. Look at your spending and consider your personal goals to determine what type of rewards program is the best fit for you. Also, consider the negatives of a card. What fees are charged, and are there any trade-offs compared to choosing a card that doesn’t earn rewards?
Annual Fee
An annual fee on a credit card is essentially a fee you pay to have a specific credit card. The annual fee will vary by card, but cards charging higher annual fees often grant you additional perks and higher rewards rates that may make the annual fee worth paying.
Sign-Up Bonus
A sign-up bonus, also called a credit card welcome bonus, is an incentive offered by a credit card issuer to encourage new customers to sign up for a credit card. These bonuses can include additional cash back, points or miles for hitting a spending threshold in a certain amount of time after your card approval. Some cards may also offer additional perks, reduced annual fees, introductory APR periods or even merchandise as a sign-up bonus.
0% APR Period
A 0% APR credit card offers a limited period of introductory 0% APR on either new purchases, balance transfers or both. This break from interest typically lasts anywhere from six months to nearly two years. Read the terms and conditions carefully to ensure you don’t end up with surprise fees. Most balance transfers apply a fee of $5 to $10 dollars or 3% to 5% for each transfer, whichever is greater. Additionally, carrying a balance typically nullifies your grace period.
With a deferred interest offer, if balances are not paid off by the end of the period, interest will be charged retroactively to the date of the purchase or balance transfer.
Foreign Transaction Fees
A foreign transaction fee is typically 1% to 3% of the amount of a purchase and is charged when you make a purchase in a foreign country or currency. Some credit cards do not charge foreign transaction fees, so if you plan to travel internationally and use your card, look for one without the fee.