You should consider credit cards with miles rewards if you travel a lot, use your credit cards for many expenses, and you are financially responsible. Although credit cards that offer miles for rewards seem very enticing, they are similar to other reward credit cards in that they are not for everyone. Not everyone is eligible for the cards, either.
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Credit cards in general are a big financial responsibility and are not to be taken lightly. Rewards credit cards, such as miles rewards, are an even bigger responsibility because they generally have higher interest rates and have an annual fee. Understand what is expected of you before you rush into getting one.
Who is eligible for a miles rewards credit card?
Not everyone will qualify for a credit card with rewards. One of the biggest determinants in being approved for a credit card is your credit score.
In general, people who have good to great credit scores will be eligible for a rewards credit card. In addition, people who earn higher incomes will also be more eligible for a rewards credit card.
If you do not have a good credit score, there is a good chance that you will not qualify for a credit card that offers miles rewards. You may have a poor history because you are young and haven’t had the opportunity to build up much credit, or it may be because you have been financially irresponsible and have had numerous late payments, items in collection, or a big debt to income ratio. For tips on improving your score, visit SmartMoney.
Who is a good candidate for credit cards with miles rewards?
A rewards credit card with miles can be a great choice for a number of individuals. Someone who does a lot of travel, for either business or pleasure, would be a good candidate because he or she would appreciate the reward.
An air miles credit card would also be a good choice for those who rack up a lot of expenses on their credit card. It takes a lot of money and points to earn a ticket, so those who use their credit cards often would earn more tickets faster.
When is a credit card with miles rewards not a good idea?
A miles rewards credit card is not the best choice for everyone. Even if you are eligible for a card, you may determine that it is not the card for you. Obviously if you don’t like to travel or don’t travel often, you may not want a card that specifically builds up points for travel.
If you are not a big traveler but use your credit card a lot, you may want to get a different rewards credit card. Many credit cards build up bonus points that can be used for a variety of other things rather than one specific reward.
If you do not use a credit card a lot, a rewards credit card of any kind is not a good idea. Most of them have credit card annual fees that do not make it worth the few rewards that you build up. They are also not a good idea if you carry a balance from month to month.
Rewards credit cards often have higher interest rates than regular credit cards. This is not a big deal if you pay off your credit cards every month, but it is if you do not. If you carry over a balance and are paying high interest fees, the rewards that you build up will not be worth the extra credit card debt.
What else should you consider in regards to credit cards with miles rewards?
When you are searching for a miles rewards card, there are a couple of things to keep in mind. Some are to find a credit card with the lowest, or no, annual fee and one with low interest rates. Also, look for cards with few or no restrictions.
In order to get the most out of your rewards card, find one that has no blackout dates and no timeline in which you need to book your flight.
Also, ask to see what the average availability of rewards flights there are. A credit card with miles rewards can be a great bonus if you find the right one.
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