A credit card started basically as a tool of convenience. Now, tough competition is making credit card companies offer a variety of deals as inducements. While there are introductory offers and good deals on balance transfer, the best part of using a credit card is the rewards program. There is such wonderful stuff that you can get when you use your credit card. The thrill of getting credit card rewards is great. One of the best cards in the market offering excellent rewards is the American express credit card.
There are many kinds of reward credit cards but they can be slotted into three kinds of programs. Let us examine some of these reward programs
Savings programs - In this category fall a number of cards that help you set aside money towards investment, pay your mortgage or avail major discounts on big purchases like automobiles.
- One variant of this kind of card is the Auto rewards credit cards specifically designed for those individuals who buy automobiles regularly.
Cash- back programs - This category is often a good choice for many as you can get a rebate on your spend. To make them apply for the card, this program is designed to allure customers. People benefit when they use this kind of card. Cash back ranges from 1% to 5%, depending on the issuing company. The cash back is mailed to the credit card holder or is adjusted in the balance as credit.
- One variant of this card is the gas card. You can fill gas and earn points on what you spend or get cash back with this kind of card. You can also make use of this card to make other purchases and get the benefit of cash back. The cost of gas on account of rewards and cash back actually reduces with this card. Having a gas card gives you peace of mind as you know that you can fill-up at any point when you travel in your own car.
You can avail of rewards and cash back with another variant of the dining rewards credit card. If you are the kind of person who enjoys the dining experience, this card will be useful. You can earn about 1% to 3% cash back on your spending. The major credit card companies, Visa, MasterCard and AMEX offer this kind of credit card. Many of these cards don't have an expiry date and hence you can accumulate points till you wish to do so.
If you are a frequent traveller,you will reap rich rewards with this program- Travel programs.
- The frequent flyer credit card makes it easy to travel on business or pleasure and also reward for it. You can earn points on your spend through this credit card. By using the points that you accumulated,you can also upgrade. However there is no point in holding this card if you travel infrequently.
Another variant of this program are Hotel rewards credit cards. You can use bonus points that you earn on your credit card spend towards hotel accommodation. This can be used for planning for vacations.
Before you apply for any one of these reward credit cards, you need to know some basic about these cards: These cards are meant for 'deadbeats', or those people who pay their outstanding in full, every month. The deals on reward credit cards keep changing as per usage. Last but not the least; don't get carried away by the new rewards that are offered along with the card. When you apply for a credit card, it affects your credit score. Remember, the more the number of credit cards, the more damage it caused to your credit rating
For credit card companies, acquiring customers is big business, and most cards today offer some kind of incentive for running up the charges on your plastic. If you're not careful, and use your card at will just to collect a few measly points, you could get stung. But by following a few simple rules, you can turn the tables on the credit cards companies and use that ?rewards? card to your advantage.
What to choose?
Most likely, your mailbox is full of pre-approved offers for new and exciting credit cards. In fact, in 2005 over 6 billion unsolicited credit card applications were mailed. The average person received approximately 72 offers. If you're in the market for a new card, it's important to weigh your options carefully. Most credit cards today offer some kind of rewards, but which one is right for you?
Take a look at your lifestyle and spending habits. Would you benefit from a points-based rewards card, an air mileage card, or one that offers cash back on purchases? Points-based cards usually give you one point for every dollar charged. When you accumulate enough, the credit card company will usually have a shopping portal set up, where you can redeem your points on a variety of products (e.g., electronics, gas cards, travel, etc.).
Problem is, most items in the catalogue are ludicrously overpriced, though it's better than nothing. Air mileage cards offer great benefits to the frequent flier, but in today's airline industry, who's to say how much fees will be raised by the time you're ready to redeem? With cash back cards, there's most likely a set amount you'll need to charge annually before you reap any benefits, so make sure you read the fine print before you sign up.
Take Advantage
Quite simply, offering incentive-laden cards are a way for credit card companies to get you to sign up. Rarely are the rewards worth the interest rates you'll pay if you carry a monthly balance. But therein lies the rub?pay off your credit card every month and put those rewards to work. Here's how: Charge as much as you can on your rewards card. We know, it goes against everything you were ever taught about using a credit card. Let us explain.
If your collectors allow it, charge every bill you have to your credit card instead of using a debit card or writing a check. Then, pay that balance off immediately to avoid incurring an interest fee. You'll collect big rewards points fast, and it'll be just like paying cash. Be disciplined about it though, even one month of letting those charges sit on your card can be a killer when the fee kicks in.
Another idea: instead of having separate credit card accounts for you and your spouse, ask for an increase in your credit limit and a companion card for one account. The more you both swipe the plastic, the quicker you'll accumulate rewards points.
Off the beaten path
As rewards cards have become more prevalent, credit card companies have come up with new incentives to make their cards more desirable to consumers. Many cards have a system that provides extra rewards points to customers who shop with certain vendors. Some will even offer coupons where you can save big shopping with certain companies while still earning extra points. It might take a little more effort, but it will certainly rack up the rewards points at a vigorous pace.
Both Richard Greenwood & Joe Kenny are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Richard Greenwood has sinced written about articles on various topics from Debit Credit Card, Credit Card Offers and American Express Card. Richard Greenwood heads up website click4credit.com.au. The site features cards from a wide range of issuers including the. Richard Greenwood's top article generates over 135000 views. to your Favourites.
Joe Kenny has sinced written about articles on various topics from Mortgage, Credit Cards and Life Insurance. Joe Kenny writes for the Card Guide, a UK based site, visit today for some. Joe Kenny's top article generates over 49500 views. to your Favourites.