Retail rewards credit cards

A retail rewards credit card is great for both the credit card company and for the store that is offering it. It may or may not be a good deal for the consumer. It will depend on how responsible you are in using your card. This type of credit card is very popular in the US, but recently, it's been gaining ground in many European countries as well, with American Express all over the EU, and American banks like Beobank in countries like Belgium.

A retail rewards credit card works like most other rewards cards except that it offers one huge advantage. Retail rewards cards are branded with one specific retailer so any rewards that you get have to be redeemed through that retailer. However the huge advantage that you have with these cards is that when you make purchases with that retailer you will get double or in some cases triple the number of rewards points. This can really add up quickly so it may be a good idea to get a card with one or two of your favorite retailers.

Obviously if you are going to get a retail rewards card you are going to want to get one that is offered in conjunction with a store that you shop at regularly since this will help you to maximize your rewards. However this can be a bit tricky. You aren't going to get a credit card that is branded with every store so you will have to decide on the one that you want to shop at. This then tends to encourage you to do all of your shopping at one store in order to maximize your rewards. However it may make more sense to shop around to find a better price rather than to try to maximize your points. Or it may not you are going to have to do the math to figure this out.

There are a couple of ways that a retail rewards credit card can be a bit of a problem. One of them is that it tends to encourage you to use your card in a reckless way. The whole point of a retail rewards card is that it is supposed to encourage you to use your card in the store that it is offered in conjunction with. The problem is that most financial experts would tell you that it usually doesn't make sense to use your card for the purchases that you would make in a retail store. If you don't pay off your bill in full each month you really getting no benefit since it will be more than offset by the interest that you have to pay.

That brings us to the other problem, the interest that is charged by most retail reward credit cards. It isn't necessarily higher than the rates charged by other companies but most people really don't know. When shopping for a new credit card finding the one with the lowest interest rate should be the primary concern. If this happens to be a retail rewards card great, if not then it probably isn't a good idea to get one.