Guide To Reward Type Credit Cards
Among all types of credit cards, credit cards offering rewards
or bonus points are usually the ones with the highest interest
rates. But if you're not cash strapped and you've got a steady
(not to mention abundant) source of income then maybe, this type
of credit card is the ideal credit card for you.
The way a credit card offering rewards or bonuses works is quite
simple. Each time you use your credit card, you are awarded a
point. The number of points you're awarded depends on the amount
of your purchase. You can maximize the use of your credit card
if you're also able to pay off your purchases before it could
incur high finance charges. If you don't, then whatever reward
or bonus you'll be earning later on may just be equal to what
you've paid the company for in terms of interest charges.
There are different types of rewards that are offered by credit
card companies and it is certainly better that you choose one
that would suit you best to make you more motivated when it
comes to paying promptly. Some credit cards offer travel
benefits as rewards. These benefits include but are not limited
to free air travel, free hotel stays and rental cars.
On the other hand, there are other credit cards that target
shoppers as their primary client. For these people, they offer
cash rebates, discounts on their favorite stores as well as free
items of their choice. If your credit card is affiliated with a
gas company, for example, then naturally one of the rewards that
you'll receive is free gas for your car. This is not a bad
bargain at all when you consider the soaring prices for gas.
To save and earn more using your reward type credit card then
it's better to remember that you should only use your reward
type credit card for short term or cheap purchases which you can
easily pay off before it can incur high interest rates. On the
other hand, long term or expensive purchases are better charged
to credit cards that do not offer any rewards but have lower
ongoing APR.
Secondly, make it a point to shop as much as you can on the
stores or brands that are affiliated with your credit card
company because it will earn you bonus points that you may not
get from other stores.
Lastly, if you're just planning to get a reward type credit card
of your own, do make sure that you get the highest amount of
sign up bonus that you can.