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You may have been offered a few cards that come with benefits that just sound too good to pass up on such as reward cards that offer massive bonus points upon sign up. But how do you know that you are ready to take on a credit card that comes with rewards and a higher annual fee? These are five signs that you are ready to manage a rewards card and reap the benefits.
A budget aficionado
If you have been flexing your budget muscle and master the arts of being able to stick to a budget then you can consider taking out a rewards card. Having a budget set in place is one of the signs that you are able to manage your finances, even if it takes much discipline. Having a skill set where you are able to make your credit card work around your budget is also a thumbs up that you will manage with a reward card.
You don’t carry over a balance
Managing to meet your credit card repayments is essential when choosing a card that is suitable for you. According to ASIC, 1 in 6 Aussies struggle with credit card debt and a further 45 billion is owed nationwide. If you are able to pay off your balance on your credit card without carrying a balance over then you can consider taking out a rewards card. Always keep in mind that rewards cards come with an annual fee that needs to be considered.
You meet the spending requirements
It is advisable that when comparing cards to find one that is suitable for you that you check the required criteria. Most reward cards require that you spend a certain amount to access points. If you already do not spend the amount that is required to access the benefits of your card you could blow a hole into your budget. There are plenty of cards that you can choose from to find something that matches your current spending cap.
You understand how the reward program works
Reward programs vary in terms of the value that they attach to points. The card that you have will also influence the value of your points. Reading the fine print of your rewards card will help you know how to use your card wisely to gain points. This also means checking the limitation of your rewards card. It can also see if you are paying a fee that is worth the points.
You found a low rate card
The benefits of having a low rate credit card can make having a rewards card worth your while. For example, a low rate card can help reduce the amount you pay in terms of interest and help you save in the process. Using a comparison site can be one of the ways that you can quickly compare various cards to get the best deal for you.
It is vital that you constantly assess whether your card is the right one for you. Having the right card will not only cost you, but it can also affect your credit score if you start missing payments.
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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.
The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.
