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Limitations on credit card rewards

[Saturday, October 23rd, 2010]

When you have credit card rewards and deals to choose from you can get a huge thrill out of using credit cards. There are numerous attractive benefits in the form of interesting benefits and cash for those with credit cards. The rewards programs are an incentive to shop and earn good incentives but there are limitations and catches to it which make it difficult to decide whether the benefits are truly worth spending on.

Annual limits: Often the number of reward points that can be earned over a period of a year is fixed for most credit cards. Thus the company can have an idea of the expenses it will have to incur on behalf of each customer. There are of course situations where these points may be less than what you spend on a normal basis. There are also limits to how much of the value you can redeem thus you may earn more points but still be redeeming less on it.

Monthly Limits: There will also be different limits based on every month of purchasing and the limit may be based on the points earned in a year as well. Thus about 5000 points may be the limit for a month.

Category Limits: There will also be limits in case of categories available. For example when there are higher cash back offers, there may be a required amount that must be spent before someone is eligible to earn points in a year`s time.

Rewards Expiration: Yet another means credit card issuers use to make sure rewards are limited is by controlling the expiration date. Sometimes the reward points expire with ease in certain months or if a minimum payment if not met with. Therefore consumers have to be careful to use their reward cards carefully.

Reward Thresholds: This is another means by which there are limits placed on the rewards earned and redeemed. In order to redeem points consumers have to spend and earn a certain amount before being able to use their points.

Reward Costs: This is yet another mechanism which is used to limit the rewards earned by consumers on their card. There are a number of different fees and these will add to the cost of the reward and sometimes the total tally of fees can be more than the value of the reward earned making it rather a bad choice.

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