How to Choose a Credit Card When the Rewards Look the Same

iQuanti: There are tons of credit cards out there. But look through enough of them, and you’ll realize that many offer the same cashback or mileage benefits.
Does that make both cards equal?
Not exactly. There are numerous other factors to consider when trying to compare credit cards that may appear the same at first glance. Here are a few.
1. Annual Fee
Some cards charge an annual fee just for having the card. Every year, in the month you opened the card, the card company charges this to your account and adds it to your card balance.
Companies usually charge these to cover the costs of offering card benefits.
This can be annoying at best and budget-breaking at worst. Thus, check to see if either card has an annual fee. No point in paying extra without additional benefits.
2. APR
Ideally, you pay your full balance every month. However, that isn’t always possible — you may get charged interest.
In this case, you want the card with the lower APR. This will minimize your interest costs in case you need to carry a balance for a little bit.
3. Foreign Transaction Fees
Some cards may charge foreign transaction fees if you spend money in another country with that card or if you buy something from a foreign merchant.
These aren’t usually too large, but they can add up if you frequently order things internationally or travel outside of the country often. They’ll eat right into any rewards you earn.
You’ll want to dig into the terms and conditions of any card, as these fees can be buried fairly deep in them sometimes. The savings are worth it, though.
4. Introductory Offers
Many card companies offer various introductory bonuses if you sign up for their cards.
For instance, some offer a fixed amount of cash back or miles (such as $150 or 100,000 miles) when you spend a certain amount of money on qualifying purchases over an intro period (such as 3 months). Others may offer a match of all the rewards earned in your first year as a cardholder.
When both cards are the same, consider the size of each’s welcome bonus.
Additionally, cards may offer introductory 0% APRs for balance transfers and purchases. These usually last a year or longer, letting you pay down debt or buy things interest-free (as long as you make the minimum payment).
Weigh your financial situation when looking at identical cards. If you want to do a balance transfer soon, pick the card with the special intro balance transfer APR that’s longer (or that has one at all).
5. Redemption Restrictions
Two cards could offer the exact same rewards structure, but one might be more flexible in redeeming than the other.
For instance, one card might let you redeem any or all of your points every month. Another with the same cash back rates might only let you redeem at least $25 worth of points, or only in certain increments (such as $5).
Cashback isn’t useful when you can’t turn it into cash — so go for the card that’s more flexible if they offer the same rewards rates.
Pick the Right Card
When two cards have the same rewards structure, there’s plenty more to look at. Consider your financial situation and goals, as this can help you weigh which of the other aspects of each card are important.
Source: iQuanti, Inc.