If you're shopping around for a credit card that promises rewards, here are important things to consider:
Annual fee
It's nice to have a credit card that offers free access to a gym or spa facility at a luxury hotel or a 30 per cent discount on dining at popular restaurants, but you can end up paying as much as Dh1,500 a year on membership fees. If you think the value of rewards you will be getting will offset the cost of card maintenance, then go ahead and get a rewards card. Most banks collect between Dh100 and Dh1,500 in membership fees yearly. In general, the higher the membership, the more rewards and privileges you will get.
Minimum spend
Just because your bank offers rewards doesn't mean you can always count on getting a mall voucher, free ticket or cash back.
There are minimum spending requirements to meet to qualify for points or air miles. So, before you start dreaming about a free iPad or your dream destination, check with your bank how much you need to be spending to earn points.
Points/air miles threshold
Being eligible for a rewards programme doesn't guarantee freebies either. Some rewards schemes require at least 5,000 to 12,000 points before you can claim any reward.
Finance charges
If there's no guarantee that you're able to pay your credit card dues in full every month, it's important to compare interest rates before signing up for a particular rewards scheme. Banks in the UAE currently charge interest between 1.66 per cent and 3.09 per cent per month on unpaid dues.
Freebies
Some credit card loyalty schemes have limited offers. The shopping vouchers you win may only be used at one grocery store or perhaps you can redeem free tickets from only one airline. If you rarely watch movies or buy groceries, there's no point in getting a supermarket or cinema rewards card. But if you frequently fly on one airline, it's worth checking if your favourite carrier has a co-branded credit card with a major bank.
Terms and conditions
Always read the fine print before enrolling in any rewards programme so you won't encounter surprises later on. The terms and conditions in most loyalty schemes specify that the bank and its partners have the right to change, modify or cancel reward levels any time even without the cardholder's notice. Some credit card spenders in Dubai, for example, have complained that their bank has recently slashed the points redeemable for every dirham or dollar spent. To those who did not review the terms and conditions, this came as a surprise.
