Debunking Common Myths About Rewards Credit Cards

Common Myths About Rewards Credit Cards

Rewards credit cards offer enticing benefits, but they're often misunderstood. Here, we debunk some common myths and guide you to make informed choices.

Rates and terms shown are representative. Your actual rate depends on your credit profile and circumstances. This is not financial advice — always read the lender's terms before applying.

Myth 1: More Expensive Cards Always Offer More Rewards

The assumption that higher fees equate to better rewards is misleading. While premium cards like the American Express Gold Card offer substantial perks such as 12 complimentary airport lounge visits and up to R4M travel insurance, they come with a hefty R120/mo fee. In contrast, the FNB Gold Credit Card costs just R50/mo yet offers up to 15% back on purchases at certain retailers. Consider your spending habits before opting for a high-fee card.

If premium fees aren't in your budget, consider cards that offer strong value without the high cost. Next, let's tackle the myth about interest rates.

Myth 2: All Rewards Cards Have High APRs

While it's true that many rewards cards sport higher APRs, not all do. Some cards offer introductory 0% APR periods, but watch out for the eventual increase. The key is to pay off your balance monthly to avoid interest charges. For those who carry a balance, rewards might not outweigh the interest paid.

Myth 3: Rewards Are Always Worth It

Rewards can be enticing, but they're not always worth the trouble. Consider the SAA Voyager Premium Credit Card, which offers unlimited lounge access and a generous bonus, but its R193/mo fee means you need to fly often to break even. Evaluate your travel frequency and redemption value to decide if such a card suits you.

As we've seen, rewards cards require a strategic approach. Speaking of strategy, if you're weighing options, don't miss our detailed comparison in American Express vs FNB Gold: Which Rewards Card Delivers More Value? — it's an eye-opener.