The introduction of a variety of reward credit card and specialized credit card rewards make more room for more enhanced features of credit cards. For example, aside from standard credit cards, there are also small business credit cards for small enterprises; corporate credit card for large companies, student credit cards for young people and students, and a variety of reward points credit cards that offers wonderful choices of reward programs.
Different types of reward credit cards also have different kinds of bonuses to offer. One type of rewards credit cards program is the cash back rewards system. Through a cash back system, the credit card holder is entitled to earn points and collect as much points as he can by using his credit card on his purchases. The points he earned will be equivalent to a certain amount of cash which he can use to make a new purchase or to pay off a sum of his balance.
The cash back rewards program is ideal for people who use their credit cards to make large purchases frequently or at regular intervals. Those who own a business, who regularly purchase goods or materials for his production, have a greater opportunity to gather loads of points in just a short time. Thus, a credit card which offers cash back rewards program is most advantageous for businessmen and entrepreneurs. However, even if you're just a regular employee, you can still benefit from cash rewards programs. As long as you choose a credit card which does not impose expiration or a limited time period in collecting points, you can still earn points even if it takes quite a longer time.
Aside from cash back, cash rebates is also a similar system. The only difference is that, with every buy, you will receive a certain percentage of cash from the total amount of your purchase. You don't necessarily have to collect points. Each time you make a purchase, you are instantly awarded a certain percentage of cash rebate.
Another popular reward that credit card companies offer is the free travel privilege. Just like with cash back system, you need to collect points in your account. But this time, instead of cash back rewards, your credit card points are equivalent to travel miles. When you've gathered enough travel miles reward credit card points, you will be entitled to a free travel ticket with an affiliate airline. The destination will depend on the airline sponsor and also on the amount of mileage points you earned. The more mileage you earn, the more expensive will be your reward destination.
Gas reward programs are also popular among credit card companies where the card holder earns points each time he re-fuels with an affiliate gas station until he reaches the minimum points required to be entitled for a full tank of gas for free. Other types of bonuses that credit cards provide their customers are free gift items and discounted rates from participating stores and establishments. Promotional rates such as 0% introductory APR on purchases or balance transfers are also common offers. Introductory offers are great as long as you make sure that the rates will remain at a reasonable range when the introductory period expires.
Obviously, with all these rewards available, reward credit cards are hard to resist. Benfits and reward points make reward credit cards more fun and useful. The key to getting the most out of credit card rewards is of course to stay within your credit limit, stay within your budget, and keep up with the terms of payment all year round. This way, you can build up good credit while earning rewards at the same time.
Copyright (c) 2008 Ann Wilson
Using credit cards wisely is part of an overall financial plan that should include budgeting, savings/investment, debt management and insurance. In your economic life, money is ?fungible,? meaning that all these areas are interconnected, and a dollar saved in one area can be spent in another. It all comes out of one ?pot,? so to speak, so any time you reach into that pot for more than is budgeted, you will affect your entire financial plan.
That said, there are ways to save money on credit cards ? shopping around for interest rates, getting cards with no annual fee, paying your balance off monthly ? but there are also ways to make money with them. This is where rewards and/or ?points? programs come into play. Remember, though, that credit card companies do not promote rewards programs out of kindness or on a whim. They do it because they can make money doing so. Therefore, you need to know how rewards programs work, and have the discipline to work them to your advantage, or they will just be another expense to you, regardless of the occasional item you get to trade points for (and it may even come in a box with ribbon on it).
Rebates vs. points
When considering what credit card reward programs to join, make sure to research the subject well and think it through. You also need to ensure that the type of program you choose fits your lifestyle and temperament. If you are a bachelor, you don't need a card that builds rewards points at "Baby & Boo's Clothes for Youths" or anything like that. You should get reward cards whose advantages that are of real value to you, and valuable right now, not in three years. Naturally, the primary advantage of a rewards program that is well-managed (by you and by the credit card company) is the fact you will be obtaining benefits worth more than the programs cost you.
The two most popular rewards programs are (1) accumulating points toward merchandise or services and (2) getting cash rebates, usually annually. The Discover card is famous for its rebate programs, but the fact is that there are a number of limitations and you have to work diligently to get anything close to the maximum 5% annual rebate. Other cards, from Visa and MasterCard to oil company cards, have rebate programs, too, but most often have points-based rewards programs that are geared to travel or shopping. You need to make this decision, cash back or points, when deciding among the credit cards and rewards programs in effect today.
Tailoring the programs
You may decide that you want a ?cash back? card or, better yet, one that does not offer just cash, but also gives you the option of taking rebates in the form of gift certificates or cards. Sometimes, for extra incentive, gift certificates that are used at specified businesses can result in up to double the cash back. If you are a big fan of getting real ?bang for your buck,? then you should consider getting a credit card that offers these expanded choices.
Rewards programs in which you build up points can be advantageous especially when used for travel redemption. In fact, among the very first credit card rewards programs were some that let you build up ?miles? for use with certain airlines. Today, of course, you can do many more things with your points, and anything you want with your annual cash rebates. Programs run by the different credit card companies share a number of basic characteristics, of course, but then offer incredible variety when it comes to how they operate, what they cost and what they really offer in value.
Making the choice(s)
Whatever rewards program you join, read all the fine print. Make sure you understand what purchases are not qualified, that is, do not earn you any points or rebates. There will always be exclusions. Some cards offer rewards programs with no annual fee, while others will waive the first year's fee if your spending reaches a certain threshold, but it is very hard to get a no-fee program unless your credit is excellent and your purchases add up to a hefty number.
You should take the time to crunch a few numbers to see if joining a rewards program or two is worth your while. The annual fee, the interest you pay, the amount you use your card ? all of these will affect your total cost of membership, and your benefits need to exceed the cost or you will simply be handing over extra money to the credit card company and the bank behind it. Talk to some friends or coworkers about their experiences with rewards programs, and interpret what you hear in terms of your own needs, buying patterns and financial status. The last thing you want to do is make the rewards program a reward for the credit card company instead of yourself!
Both Ann Wilson & Todd Holiday 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.
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 on. Ann Wilson's top article generates over 14800 views. to your Favourites.
Todd Holiday has sinced written about articles on various topics from Credit Cards, American Express Card. Credit Cards Made Simple provides information on helping you make the right choice when choosing and understanding the credit card pr. Todd Holiday's top article generates over 2900 views. to your Favourites.