Credit card providers are constantly developing new programs with benefits to attract the interest of potential customers. One of the ways is to offer a rewards credit card. Whether it is travel rewards, cash rebates or free merchandise discounts, these credit cards offer attractive benefits to consumers who use them for their purchases.
What is a rewarded credit card?
A rewards credit card offers tangible benefits to its owner. In return for use and membership to the card, your purchases accumulate in the form of points, which you can possibly redeem for a trip, plane tickets or products.
Why get a credit card with rewards?
If you already use a credit card to pay for most of your purchases and repay your balance every month, a rewarded credit card will give you the opportunity to earn valuable benefits. With a rewarded credit card, every purchase you make will help you earn points that can be redeemed for flights, hotel rooms, cash back, and other rewards. If you’re one of the 70% of Americans who pay off their credit card balance each month to avoid interest charges, a Rewarded Credit Card can be a great way to get more on your purchases.
What kind of rewards can you get?
The most common types of rewards are travel points, cash back, points from retailers and free gas. Credit cards with travel rewards offer travel points for each of your purchases, which allows you to accumulate and use them to purchase airline tickets or stay at the hotel. Cash Back Credit Cards offer cash rebates on purchases, typically between 0.75% and 4% on every dollar spent. Your discount will be applied directly to your balance or a check will be mailed to you.
Store credit cards are available from some retailers and you earn points when you shop at these stores. Finally, many rewarded credit cards offer insurance coverage, such as medical insurance while traveling, cancellation and interruption insurance, as well as collision and non-life insurance. These insurance products cost you nothing more and you can take advantage of them in the event of an accident or unforeseen events.
Types of Reward Credit Cards
There are many kinds of rewarded credit cards, but there are some that are more popular than others. The most widely available cards are:
Travel Reward Credit Cards:
Travel reward credit cards offer points every time you make a purchase. These points can then be exchanged for a plane ticket or a hotel room. When you apply for this card, the supplier will explain how much you will receive depending on the number of dollars spent and what these points can be worth in the form of rewards. In addition, some credit card providers offer you a membership bonus in the form of additional points. For this type of card, it is important to know what you can get by exchanging the points you have accumulated. Some cards give you the right to buy airline tickets only with a specific company or specific seats.
Keep in mind that in order to accumulate and redeem your rewards points, your credit card account must be in good condition, in the sense that you must not have an overdue account and you make your minimum payments every month.
Credit cards with cashback:
Credit cards with cashback give you a discount on the money you spend. For every dollar you put on the credit card, it is not uncommon to receive between 0.75% and 2.00% in return for cash. In the USA, the maximum amount of discount you can receive for gas, grocery or food purchases is 4.00% and up to 5.00% for special promotions. Indeed, the advantage of using these types of cards is that your purchases become less expensive than if you use cash or a debit card to pay your bills. Be warned, however, that not all types of purchases have the same discount value. With certain kinds of credit cards, you can receive a return of 4. 00% for gas and groceries, but only 2.00% on pharmacy purchases. In addition, some credit cards stipulate that a maximum cashback allowance is allocated per year. For example, A certain brand of the credit card may offer you a 4.00% return for up to $ 25,000.00 worth of gas and groceries. Above this amount, you will receive only 1.00% cashback.
Store Credit Card:
Store credit cards are tied to specific stores and offer only points that can be redeemed for their merchandise. Even though these credit cards offer significant discounts on membership, they carry very high-interest rates. Consider a credit card from certain stores with additional benefits offered at a specific store.
Insurance-linked to your reward credit card
The benefits of Reward Credit Cards are not limited to points, cashback, or free merchandise that you receive with your purchases. Most reward cards come with a wide selection of insurance products. These include trip cancellation insurance, collision damage insurance and car insurance for travelers. These products come with no additional fees and provide valuable coverage for the cardholder. Find more information on this page.
Obviously, it is not wise to spend money just to get the rewards, especially if you have to keep balance and pay the interest charges. That said, if you already have made purchases using your credit card, it is better to take advantage of it to accumulate rewards points. Each month, 70% of Americans pay their credit card balance in full, indicating that they do not pay interest charges. If you are part of this majority of credit card holders, it only makes sense to reward you for the responsible use of your credit card.