5 Ways Credit Card Points Were Built To Confuse You
If you’re planning on paying for your next holiday with points, read this first.
You’ve gotten all fired up because your new credit card is going to take you places – literally! All you have to do is charge your groceries, petrol and everything else in between and, if your calculations are correct, you’ll have enough points to pay your way to Halong Bay!
Except. The fine print. Such a pain. Compound that with reward tiers, qualifiers and disqualifiers. And you’re as far from your holiday in points as you are in actual physical kilometres!
So before you count on your redemption blessings before they hatch, here are a few of those hidden clauses you should note:
1. A case of new better than old. Cards often include a clause or two to minimize your rewards but the most important one is the “Introductory offer”. Your first months as a card-holding member might earn you more rewards than after – maybe up to 2 times more. Once you’re over that hill, however, the card kicks back to its regular rates.
2. Credit Cards are like a good type of stalkers – they track everything you’ve spent whether that’s on travel, restaurants, petrol, groceries or shopping. Now they’re using that data to help – or hurt – your rewards. Some cards will reward you with up to 3% cash rebates on shopping but that may drop to as low as 0.25% if it’s on groceries. Each card is different. Make sure to read up on the category spend so that you are matching up the right spend with the right card.
3. A dollar isn’t worth a dollar anymore – and that’s true too in Credit Card world. One HSBC Reward Point isn’t quite the same value as an OCBC$ or even a UNI$. Each bank has its own – complicated – rewards calculator. And when you stack up clause over clause, it becomes an exercise of extreme patience to compare cards against each other. A comparison engine like GoBear’s equalizes the rewards so you can immediately tell dollar-for-dollar how much rewards you’ll receive.
4. Overachievers won’t benefit here. Cap Limits kick in when you’ve spent on your card - too little or too much - but won’t earn your rewards. This happens in two situations: when you use a card that only starts rewarding once you’ve spent over a certain amount. Or when it stops rewarding you once you’ve hit the ceiling limits for spend. These can be reviewed monthly, quarterly even annually. Know the cap limits so you can cut off spending when the card stops rewarding you.
5. Where you spend matters – some cards pay more if you shop at designated stores. Some may have high rebates for online shopping – which is great if that’s all you ever do. Even the day of the week matters in a clause. New cards are rewarding weekend spend more than weekday ones with a difference of as much as 2% Cashbacks.