For consumers with good credit, now might be the best time ever to seek out new credit card accounts. After a period of relative stinginess with credit during the economic downturn, lenders are aggressively marketing all sorts of accounts to consumers. But this time around they’re going after those borrowers top-notch credit ratings, often extending offers for cards with a wide range of benefits, known as “rewards cards.” However, if you have good credit and you’re wondering just what may be available to you, the variety can get a little confusing.
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The first thing you should know about the offers available to you is that if you have a higher credit score, you’re considered far less risky of an investment. As such, lenders don’t feel the need to give you high interest rates, and you’ll likely end up paying far less for these accounts than consumers with lower credit scores. The higher your rating, the lower your available interest rates will be, and that can save you a lot of money, especially if you carry a balance from month to month. In addition, many of these accounts might come with annual fees that would add to your balance if you had a lower credit rating, but these are frequently waived, at least for the first year the account is open, for those whose scores are higher.
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And if you have a good credit rating, you’ve probably also found that you’re getting a lot of offers for rewards credit cards. These are available to many borrowers, of course, but the offers for the very best rewards accounts will likely be available to you. These accounts will, again, carry lower interest rates, but will also be more generous in extending you greater benefits, such as a higher base points earned per dollar ratio, as well as added bonuses for spending in certain types of categories. Some offers might also grant you hundreds of dollars worth of miles, points or cash back just for signing up, and then even more if you meet certain spending thresholds within the first few months the account is open.
But the way you got your good credit rating in the first place was from knowing the the value of being prudent with your finances. Don’t lose that habit. Closely examine any credit card offer you receive, weighing its various benefits and potential drawbacks, and think about how opening such an account will affect all aspects of your finances – not just your credit score.
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[Related Article: The Cost of "Rewards"]