8 things to avoid when shopping for a rewards card


Some card features sound great, but waste time and money

Personal Finance Writer
Freelance writer based in New Rochelle, N.Y.

8 things to avoid when shopping for a rewards card

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So you’re shopping for a new rewards card and there’s an abundance of choices. Sometimes the best approach is knowing what you don’t want.

With that in mind, here’s a look at features that may sound
great at first glance, but might end up being a waste of money:

1. A small sign-up bonus.

These are points or cash back that can jump-start your rewards account
or be applied to other uses, such as travel or statement credits. The larger
the bonus, the higher the appeal (as well as excellent credit required to

Note, though, that some issuers, such as Chase and American Express, limit the number of cards you can apply for to deter card churners – consumers who open and close cards just to get the sign-up bonus.

“If you potentially have only one shot at getting a good bonus for signing up, you want to make it count,” says Julian Kheel, senior writer with The Points Guy and author of “The Devil’s Advocate” column on BoardingArea.com.

2. A high initial spending requirement

Big rewards come at a cost. Many rewards cards often require you to spend a minimum amount over a certain period – generally three months – before
your bonus is awarded. That sum ranges widely, from $500 to thousands of

If the minimum spend is too steep for your budget, it’s a major red flag. Typically, the more bonus points you get when
you sign up, the higher the minimum spend.

“Make sure you read the fine print,
understand what the requirement is and when it’s due,” says Ariana Arghandewal,
a blogger with the Pointchaser.com.

Most importantly, apply for the card only
when you have a plan in place for meeting and repaying that minimum spend.

3. The card doesn’t fit your lifestyle

The sweetest credit card offer isn’t worth it if the card fails to meet your
particular goals. For example, a hotel-affiliated rewards card won’t do you much good if you’re a big Airbnb fan. The upshot: You need to determine whether a
travel card or cash back card will best fit how you’ll use the rewards.

Something else to look out for: a low point
accrual or, at least, a formula that doesn’t align with your purchasing habits.
A card that gives you 2 percent back on travel and 1 percent for other expenses
isn’t a great fit
if you’re using it primarily for grocery shopping and other
everyday purchases.

“Know your spending habits,” says Alanna Smith, editor of

4. Travel cards tied to a specific chain

If you’re just getting your feet wet with rewards cards, choices that tie you to
a particular hotel chain or airline might not be the best bet. Instead, you may
want the freedom to explore different options.

In that case, a general-purpose travel
card will give you more flexibility. Examples: Cards under the Chase
Ultimate Rewards or Capital VentureOne Rewards umbrellas aren’t tied to a specific hotel chain or
airline, but points can be redeemed for travel costs on multiple airlines,
hotels or rental cars.

5. Not enough of the right perks

Your card may offer extras, but not ones you care about. For
example, if you don’t do a lot of international travel, then a card that reimburses
you for TSA Pre-check or Global Entry fees won’t be useful. Likewise, a cash back card
rewards you for spending at restaurants is not a good fit if you typically cook at home. 

“You want a card that fits your spending
style,” says Smith.

“You want a card that fits your spending

6. High annual fees

If you’re a rewards card newbie and aren’t sure which card you want, your best move is not to choose a card
with a hefty annual fee. And if you do sign up for a card with a high annual fee, do the math to figure
out whether you’ll save enough in other expenses to make it worth paying the

For example, access to American Express’s airport Centurion Lounges is
free for Platinum and Business Platinum cardholders ($550 and $450 annual fee,
respectively). If you plan on stopping at Centurion Lounges on your frequent travels, the high annual fee on those cards might make financial sense, as
entry is restricted to Amex cardholders and can cost $50 each visit for
non-Platinum cardholders.

Other cards offer credit for miscellaneous travel costs,
including Uber rides, or a free checked bag.

Know, too, that some rewards cards will waive
the annual fee for the first
year. “You can test drive the card and see if you
like it for a year,” says Smith.

7. Points that expire

It will be a bummer
to earn all those rewards, only to have them disappear if you don’t use them in

For example, with the Citi/AAdvantage Platinum Select World Elite Mastercard and United
MileagePlus Explorer Card
, your
points can expire after 18 months if you don’t take steps to keep them
active, such as  earning or redeeming
miles, or keeping your credit card account active and open.

On the other
hand, there’s no expiration date for miles accumulated with the
Gold Delta
 credit card from American Express.

For details, see “When do credit card rewards, airline miles, hotel points expire?”

8. Relying
on Discover or American Express if you travel abroad

In many countries, Mastercard and Visa are
accepted just about everywhere. Less so for American Express and Discover. The
upshot: If you travel abroad frequently, carry a more universally accepted card
in your wallet as a backup.

“You don’t want to stand in line at a shop in
London only to learn that your card isn’t accepted there,” says Smith. “Sometimes
brand loyalty has to be put on the back burner.”

See related: Our three best rewards credit cards, Reward card reviews

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