Many Pakistani Banks are currently offering reward credit cards. However it is important that you understand exactly what they are about and in what circumstances, you can make the best use of those credit cards that can not only earn you rewards but may also result in cost savings and easy access to the unique deals and offers to encash your rewards points.
Rewards Credit Cards – What are they?
The name gives it away but it is, essentially, a card that provides you with rewards each time you make a payment using that specific card. However, it is important to understand that the rewards you have collected, can differ from card to card. Each provider or bank may offer cashback in the shape of rewards OR rewards points that you can collect as you keep making purchases using your card. Such reward points can then be converted by either receiving discounts with various retailers, food chains, shops, airlines etc. If you plan well and keep a note of your earned reward points, you can make the best use of those at right time. Beware, rewards points may have an expiry so you have to earn those rewards within a certain period of time as per bank’s policy.
Do I Get a Choice of Rewards?
Generally, the majority of cards on offer will restrict you to one kind of reward once you have earned your points. However, there are some cards that are an exception to the rule as they may allow you to choose the type of reward that you receive. It is possible to have cashback or a reward gift which could be air miles or even vouchers that can be spent in specific stores. When selecting the best reward credit cards, you should review if the card offers various types of rewards or just one specific type of reward and then you can select a reward credit card based on your own lifestyle. A golden rule to earn the best value through these rewards states that you pay your credit card in full every month without paying any extra interest.
What Should You Do if You Only Want Cashback?
This comes down to the section above regarding the rewards that you can choose. If you are looking for a credit card that offers cashback only, you will have to select a cashback credit card as opposed to a rewards card. Cashback on offer is usually tiered and this means that you will earn more in your first few months of spending while other cards may only offer cashback on certain spendings such as fuel or shopping. The amount of cashback that you earn may also have a limit so you should read the small print before you apply. Again a golden rule is that if you get cashback rewards, you should use that card on regular basis for every type of payments.
When Do You Receive Your Reward?
This is all down to the card that you chose. Many of the cashback cards will pay you cash back on an annual basis that this will be credited to your account, although, some will pay it on a monthly basis. It is often not possible to have this paid to your bank account but it can be used to offset any debt that you may owe on the card. If you opted for a reward card then you could receive your vouchers, reward points on monthly or quarterly basis or maybe even just once a year. It is important that you check how long the vouchers can be kept for because they are of no use to you if you cannot use them several years down the line.
Can I Still Receive 0% Interest Offers on Purchases or Balance Transfers?
On the whole, you will struggle to find a reward or cashback credit card that comes with a 0% introductory offer. Therefore, this type of card is only suitable for those people who know that they will be able to pay off any debt at the end of each month. If you believe that you will be unable to pay off your debt each month then a reward or cashback credit card will not be for you. This is because any cashback or rewards that you earn will be wiped clean by any interest that you pay on the money that you have to pay back.
Is There an Annual Fee?
It is common paying an annual fee for Reward Cards, simply because they are giving you something back. However, some banks may offer no annual fee as a promotion. If you pay an annual fee, then, you need to really use the card and earn cashback or rewards to justify paying for the card annually. However it is fair to say that those fees are nominal.
Finally
Every reward or cashback card is different, so it is important to compare those that are available to you. You can compare all credit cards offered by leading banks in Pakistan such as UBL, Standard Chartered Bank, Bank Alfalah and Faysal Bank etc. with Mawazna.com. To get your application accepted, you will be required to have a good credit rating history and score in order to achieve the best deals and that is exactly why you need to compare and read the small print.
Mawazna.com is a growing financial services comparison platform in Pakistan that enables consumers to make more informed decisions when choosing financial products and services including comparing credit cards, selecting & applying for a specific card product offered by leading banks in Pakistan. Visit us online to compare banking (including credit cards, bank loans, bank accounts), insurance (car insurance, travel insurance, and health insurance) and broadband products to make more informed decisions.
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