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Card Offer Overload? Smart Choices Avoid Problems



Credit Card Offer Overload? Smart Choices Avoid Problems

While credit card companies may no longer be sending out thousands of unsolicited credit cards each week, there remains a heavy saturation in this sector in terms of how each company “frames” its offers to consumers. If you’re shopping around for a new credit card offer and have realized just how many various offers there are, here’s a quick guide that should help as you explore your options.

The rewards cards are plentiful; these offers are one way a credit card network uses savvy marketing efforts to lure applicants in. There are rewards cards for nearly every consumer. From travel rewards points, cash back credit card offers and hotel rewards cards, the opportunities are plentiful.

Travel Rewards Credit Cards

This category includes those offers for free flights, higher cash back rates when the credit card is used to purchase airline tickets and it also includes cash back offers associated with travel, especially when used in conjunction with airlines. The Chase Southwest Airlines Rapid Rewards Plus credit card is a fine example of just how impressive these offers can be. The co-branded card (Visa and Southwest Airlines) offers a free flight after your first purchases, bonus points, and now, you can even use your points for hotels, gifts or other travel-related expenditures.

Gas Rewards Credit Cards

If the travel rewards credit cards are geared for those who love to fly, the gas rewards credit card offers are for those who like to feel the pavement under them. These offers usually include cash back and gas discounts. Check closely, though. Sometimes there are various guidelines in place that require you pay at the pump. These are often the ideal choice for soccer moms and business travelers who drive to meetings rather than fly. The Discover Open Road credit card is a good choice as customers earn 2% cash back at gas stations and restaurants year round. There’s no annual fee, either, making it a wise financial consideration.

Cash Back Credit Cards

Of course, nothing beats cold cash. Ideally, with these offers, you’ll want to choose the one that offers 0% intro rates, additional cash back bonus categories and hopefully, the absence of an annual fee. These rewards cards also have other perks built in. For instance, the Discover Cash Back Rewards credit card has an additional 20% cash back bonus when you shop through the Discover online network. Plus, you’ll earn 5% in categories such as home improvement stores, gas and restaurants. These categories change every three months. Your intro 0% APR is good for fifteen months and this Discover does not have an annual fee.

Secured vs Prepaid

One question many people ask is, “What’s the difference between prepaid and secured credit cards?” Many use the two terms interchangeably, though there are differences. Both a secured credit card and prepaid credit card require the cardholder to deposit their own money into an account. The secured credit card, when used, doesn’t incorporate your deposit. You’re using the bank’s money with your money serving as collateral. It’s an ideal way to rebuild your credit.

A prepaid credit card uses that money you deposit. For instance, if you deposit three hundred dollars, you then have a three hundred dollar credit line. Spend fifty dollars, and your available credit drops to $250. These aren’t as strong in terms of rebuilding your credit since you’re not borrowing anyone’s money – you’re using your own.

Other differences include the potential of seeing your credit limit increased with a strong payment history on a secured credit card. Also, with a secured credit card, a credit report is pulled before you are approved, versus a prepaid card, which never pulls your credit score. A secured credit card includes a monthly statement, just as a traditional credit card. With a prepaid credit card, there’s no need for a monthly statement.

These are just a few of the many ways credit is offered via the credit card. The goal is to find the right scenario that works best for your needs. If you don’t fly often, naturally, a travel rewards card that uses airline points as its reward currency might not be the best choice for you. If you’re looking to rebuild your credit history, a secured credit card is going to help you meet those objectives. Always be sure to read the terms and conditions so that you’re confident in your decision, no matter which credit card you ultimately choose.

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