April is Financial Literacy Month—and Dupaco Credit Union is celebrating with a weeklong press series designed to empower and inform. From April 14-18, we’ll be releasing a new topic each day focused on helping take control of your personal finances. This five-part series will cover timely, relevant insights from the experts at Dupaco. Follow the series and catch up anytime at dupaco.com/newsroom.
Dubuque, IA – From cash back to travel points, reward credit cards offer perks for everyday spending—but not all rewards are created equal. When used wisely, these cards can help you earn valuable bonuses, build credit and make the most of purchases you were already planning to make. To help consumers understand the true value—and potential pitfalls—of rewards credit cards, Dupaco Credit Union shares expert insights and answers to the most common questions about choosing and using them wisely.
According to Jim Bemboom, AVP, Card Services at Dupaco, understanding the ins and outs of reward programs is the first step to making them work in your favor.
“Not all rewards programs are built the same,” said Bemboom. “Some offer great value, while others come with restrictions or hidden costs that can outweigh the perks. It’s important to understand the full picture before you apply—so the card works for you, not the other way around.”
Here are some features to consider which choosing a rewards credit card.
Annual percentage rate (APR)
Typically, reward credit cards come with a higher APR than a traditional card because you’re being rewarded. “Read the fine print and understand what the APR is before you sign-up for the card,” says Bemboom. “If you’re trying to pay down debt, opening a credit card with a higher APR-even with rewards-might not be in your best interest.”
Annual fee
Some reward credit cards charge annual fees that can cost hundreds of dollars each year. Before signing up, make sure the perks outweigh the price, advises Bemboom. “Annual fees can add up quickly. Shop around and compare your options. There are plenty of reward cards that do not charge annual fees. Be sure to check out your local financial institutions, like Dupaco, for great no fee options.”
Usage
Some rewards credit cards can only be used for certain purchases or at specific stores, such as airline tickets, clothing retailers or gas stations. If you don’t make frequent purchases at those businesses, that rewards credit card might not be the right card.
Redemption options
When researching reward cards, understand how you can redeem your awards. Some cards only allow redemptions on certain things like airline tickets.
“When trying to decide on a rewards credit card, make sure the card rewards you for things you do use. Consider a card that has flexible points. This will earn points with every purchase and can redeem the points on a variety of options, including merchandise, concert tickets, airline tickets, hotel stays and even cash back,” says Bemboom.
Carrying a balance
Carrying a balance on any credit card can be costly. However, if you do have to card a balance from month to month, Bemboom advises making sure the rewards outweigh what you pay in interest each year.
Use the points
Make sure you use those points you’ve accumulated before they expire. There’s nothing worse than working to save points to use for something special, only to find out they expired!
No matter which credit card you choose, it’s important to stick to your budget. “Spending more than you can afford—just to earn rewards—isn’t worth it,” says Bemboom. “Pay your balance in full each month, make payments on time, and keep your credit usage low.” He recommends using no more than 20% of your available credit each month. That’s because 30% of your credit score is based on credit utilization—and consistently maxing out your card, even if you’re making payments, can signal financial stress to lenders.
Choosing the right rewards credit card starts with knowing your habits and doing a little homework. When used wisely, these cards can offer real value without unnecessary costs. Take time to compare your options, ask questions, and find a card that truly works for your lifestyle—not against it. Dupaco can help find a card that fits your needs, offers flexible rewards and avoids hidden fees. Learn more at dupaco.com.
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ABOUT DUPACO COMMUNITY CREDIT UNION
Dupaco Community Credit Union is a not-for-profit, member-owned financial cooperative headquartered in Dubuque, Iowa. It is dedicated to the financial well-being of its members, and specializes in personalized financial counseling, money advice and education. It offers savings, loans, investments, insurance and wealth management products for individuals and businesses. Dupaco serves residents in 118 counties throughout Iowa, northwest Illinois and southwest Wisconsin. Founded in 1948 by ten Dubuque Packing Company employees, membership has grown to more than 173,000 with assets exceeding $3.5 billion. It has over 600 employees and 23 branch office locations. It is a Forbes Best-in-State Credit Union, Forbes America’s Best Small Employer, and a Des Moines Register Top Workplace. Learn more at www.dupaco.com.
