From movie tickets to free cash, have you ever been tempted to sign up for a credit card just for the rewards or benefits? I know I have. Check out this blog post for some tips on what you might want to consider before adding another credit card to your wallet.
Be cautious about the number of credit cards you apply for.
Credit reporting agencies record each time you apply for a credit card. Applying for too much credit could damage your credit rating by creating the impression that you may be relying too heavily on credit.
Calculate the actual value of the reward.
Remember: if the value of the reward or benefit aren’t greater than the cost you pay to get them, it isn’t worth it. The Financial Consumer Agency of Canada has some great tips on how to calculate the value of the reward or benefit.
Inform yourself on interest rates.
Unless you pay off your balance in full each month, the interest you pay may cost you more than the benefit – not to mention increasing the cost of everything you buy with your card.
Check out expiry dates.
Read the fine print of your agreement so you’re familiar with the lifecycle of the rewards. For example, will your points, credits or other benefits expire after a year if you don’t use them?
We’d love to hear your tips – leave us a comment below!