One of the motivations that make many consumers consider the purchase of credit card is the consequent incentives or rewards that are attached to the cardholder package. With so many card companies competing for customers, it is not surprising to see a variety of rewards packages emerging, all seeking offer the best of the best in attractive incentives for using your credit card for purchases.
Credit card rewards are typically offered on a points system that is keyed into the total amount of purchases made with the credit card. The more purchases you make the more access you have to various levels or types of rewards. Thus, it is a good idea to know whether you are going to make beneficial use of a rewards credit card before you seek one out. Of course, in order to determine the potential benefits, it is important to know what kinds of rewards are available.
Types of Rewards
As far as the types of rewards or incentives, card companies offer a number of exclusive benefits and gifts to cardholders who decide to purchase a rewards type of credit card. Among them, there are at least five basic incentives: cash back rewards, frequent flier miles, cash rebates, gasoline rewards, and retailer rewards.
Cash back rewards. These may be just most common form of credit card rewards offered by the card companies. Basically, the card rewards cash amounts based upon a percentage of the total credit card purchases. In some cases, this might mean a dollar for dollar percentage rate. (e.g. 1% of every $1 charged) With other packages, the cash back is awarded at specified points in time after a certain amount of money has been charged. (e.g. $10 after $1,000 is charged to the card)
Frequent flier miles. There are many credit cards that provide users with frequent flier miles that are accrued over time or on specific usage requirements established by the card company. These rewards can then be redeemed for plane tickets from participating airlines. This is a great feature for business executives who travel across the country throughout the year.
Points Rewards. With the points reward system, a certain amount of points is awarded based upon the amount of a purchase. These points can then be traded in or redeemed for all sorts of products, services, and cash awards. These might include travel discounts, gift certificates, merchandise, and limited-time services.
Gasoline rewards. With this incentive, you can earn some breaks at the gas pump by making credit card purchases. Most of the time, some form of rebate is given on a percentage rate for every purchase made.
Retailer rewards. Various businesses partner with credit card companies to provide an incentive for making purchases with the card and a percentage of each purchase goes towards providing a credit with the participating company. This could mean anything from groceries to cell phone or automobile purchases.
By knowing what types of rewards programs are out there, you will have a better concept of what sort of credit card will provide the most benefits for you. Take the time to research the various plans and be sure about what it is that you want to spend to obtain the rewards benefits.
In the past, reward credit cards were limited to cards with Frequent Flyer Miles Programs. Today, as credit card holders continue to grow and as the competition among credit card companies grows even stronger, the emergence of rewards credit cards is undoubtedly an effective marketing strategy in attracting clients.
With this in mind, it is obvious that not all reward credit cards genuinely bring rewards to its users. Therefore, as a consumer, it is your responsibility to be aware of reward credit cards that offer great deals and those that do not. In this article, let's discuss the features you should look for and the things you should avoid in a reward credit card.
Features to Look For
The Right Kind of Reward. What particular reward program can you benefit most from? Are you a frequent traveler? Do you drive a lot and spend a lot in gas? Or do you just use your credit card for shopping and groceries? Whether you choose a Frequent Flier Credit Card, a Gas Reward Credit Card, or a reward credit card with Cash Back- what matters is that it matches your spending habits and your lifestyle.
Reasonable interest rates. Obviously, you'll want a reward credit card with a reasonable APR. Yes, you can avoid the interest rate by paying your balance in full each month but you can't always guarantee that you won't need to carry your balance over for the next billing cycle. The interest rates alone can kill the value of your rewards. Always be on the safe side by choosing a reward credit card with low APR.
Reasonable fees or no fees at all. Aside from a low APR, check out the other credit card fees such as the annual fee, late fees, etc. Some reward credit cards with good APR have no annual fees at all. Clearly, you can get more from your credit card if you won't have to worry about additional fees from time to time.
Things to Avoid
Reward limits. A reward credit card may limit your rewards to only a maximum value. For instance, you can earn points but as soon as you reach $5,000 value, that's when you stop qualifying for the rewards. You'll want to stick with reward credit card that will last you a long time and not just for short period.
Blackout dates. Blackout dates often defeat your purpose of getting a reward credit card. Some reward credit card companies will not allow you to use your points at high travel times such as Christmas & Thanksgiving. You need to make sure you are aware of the blackout dates so you can properly plan your vacation.
Forfeit your rewards. Restrictions are always part of the deal. For instance, you may strive to rack up your points for the whole year to get your travel reward. But if you fail to earn enough mile points, would you be able to carry over your collected points for the next year? Or will all the points you earned be forfeited and you'll have to start from zero all over again?
Also, the timeliness of your payments is a major factor in getting your rewards. If you delay a single payment, you may be disqualified from the rewards program. Make sure that you clearly understand your reward credit card's terms and conditions on collecting and redeeming rewards.
Both Peter Kenny & Ann Wilson 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.
Peter Kenny has sinced written about articles on various topics from Credit Cards, Finances and Best Money Market. Peter Kenny is a writer for The Thrifty Scot, please visit us at and. Peter Kenny's top article generates over 368000 views. to your Favourites.
Ann Wilson has sinced written about articles on various topics from Student Credit Cards, Credit Cards and Airline Credit Cards. provides consumers with valuable reviews and information. Ann Wilson's top article generates over 14800 views. to your Favourites.