You should get a rewards credit card if you plan to pay your bill in full every month. Otherwise, expensive finance charges will quickly eat away at your savings. Rewards should also be your top priority only if you have good or excellent credit. Most applicants with low credit scores or no credit history will not be able to qualify for a good rewards card. Student credit cards (no credit history needed) and store credit cards (fair credit or better) are notable exceptions, though.
A lot depends on the circumstances, from your own financial situation and habits to the credit card offers that are available at any given time. Sometimes, you won’t have to sacrifice (much) in terms of fees or APRs by getting a credit card with rewards. You could qualify for a 0% APR rewards credit card with no annual fee, for example. Other times, you may have to prioritize either rewards or low costs.
The following tips will help you make the right decision in your case.
You should get a rewards credit card if:
- You pay your credit card bill in full every month. Rewards cards have high interest charges that could cancel out any rewards earned.
- You’re less interested in financing. If you plan on making a large purchase and stretching out the payments, your best bet would be a card with a 0% intro APR on purchases. Or, if you already owe expensive credit card debt, consider a balance transfer credit card.
- You have good or excellent credit. The best rewards credit cards require good or excellent credit for approval, and people with lower scores should prioritize low-cost credit-building over earning rewards. That doesn’t mean rule out rewards cards altogether, though. People with fair credit can get store credit cards with good rewards, for example, and there are usually some starter credit cards with modest rewards.
- You haven’t opened another card recently. Applying for too many credit cards in a short period of time doesn’t look good on your credit report. It may also result in your application being rejected. Try not to apply for more than one per year.
Ultimately, you should get a rewards credit card if it will save you more money than it costs you, based on an honest assessment of your spending and payment plans. But determining if a rewards card is right for you is only half the battle. Next, you have to figure out what type of rewards you want and which particular card to apply for. Our editors’ picks for the best rewards cards are a good place to start.
If you would like a personalized rewards card recommendation based on your latest credit score, just sign up for a free WalletHub account.
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