The New Fine Print for Rewards Credit Cards


Credit card companies certainly don’t have it easy these days as the Credit Card Accountability, Reform and Disclosure Act requires issuers to notify consumers before they hike interest rates or enforce triggers on penalty APRs.

In order to attract more high value credit customers, many issuers are revamping their rewards programs, allowing customers to earn points well above the accepted 1% industry standard.  However, consumers still need to beware.

“Don’t take promises like ‘3% on everyday purchases’ or ‘5% bonus rewards’ at face value,” Tim Chen, CEO of, a credit card ranking site, explains. “The fact is banks earn less than that on your purchases, so they have to do everything they can to keep from paying you the full amount.”

What sets one credit card rewards program apart from another is, of course, in the fine print.  Here’s the common catches consumers should guard for.

  • Annual rewards limits. This means that there is a limit to how many points you can redeem in a year. For example, NerdWallet points out Citibank’s  Citi Forward card, which gives users 8,500 bonus points if they spend $250 in the first three months, but users are limited to 75,000 points in any given year.
  • Monthly spending limits. These limit the amount of money per month that can earn rewards points. Both the Chase Freedom and    Discover More cards use this tactic. According to NerdWallet, these cards have quarterly or monthly 5% cash-back bonus promotions that are capped, meaning users can only earn the max rewards on a few hundred dollars of spending each month.
  • Limits on bonus rewards. Some cards also cap rewards spending on specific categories. Gas credit cards are big fans of this tactic, as Chen points out. “They want to make sure you aren’t using your personal card to fuel a fleet of 18-wheelers,” he says. Costco TrueEarnings American Express (Stock Quote: AXP), for example, pays 3% on a max of only $3,000 in gas purchases each year.
  • Indirect limits through shorter expirations. If your card doesn’t impose a monthly or annual limit, you may want to ask when your points expire. Many frequent flyer miles and other loyalty programs let you accumulate as many points as you want, because the time frame in which you can use them is actually shorter. (So someone like me, who continually forgets to redeem her travel rewards points, may not have as many as she thinks.) For example, Citibank’s ThankYou Points expire after three years and Bank of America’s WorldPoints expire after five.

Which credit card rewards programs are as good as they sound? Check out this list of the top five rewards cards for travelers or this list of the best rewards cards for retirees.

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