Deciding Among Credit Card Rewards Programs
It seems as though every time you turn around there's a new
credit card rewards program trying to win your business by
promising to make your everyday purchases count toward something
more. Credit card rewards can be great, since they are a way to
counteract the interest that you pay on purchases that you'd
make anyway... but not all credit card rewards programs are
right for everybody. If you've been considering getting a new
credit card that has a rewards program but aren't really sure
which program is right for you, then you're in luck.
Below you'll find information on some of the most common rewards
programs, so as to help you to decide whether that particular
program is right for you or not.
Cash Back Rewards
One of the most popular types of rewards programs is the cash
back reward... meaning that the more you use the card, the more
money you'll get back from the company as a reward. Generally,
the amount paid is a low percentage... 1.5% or 2% are the most
common percentages paid for cash back rewards, though there are
some companies that will pay between 3% and 5% to at least some
of their customers.
The reward payments are usually made once per year on the
anniversary date of the cardholder (the day that they first
activated their card), though there are a few companies that
offer instant rewards on each purchase made.
Airline Miles
Giving free airline miles that can be cashed in for tickets at
major airlines is another popular type of rewards program. The
cards that offer airline miles as a reward generally grant a
large number of miles either upon activation or the first
purchase made with the card, and then a lower number of miles
with each purchase based upon the amount of the purchase. Some
cards offer miles that can only be cashed in for certain dates,
whereas others have miles that can be used for any date. It goes
without saying that individuals who don't fly wouldn't be likely
to have much use for this particular reward program.
Shopping Discounts
There are two different types of shopping discount rewards
programs... those that are offered by retailers, and those that
are offered by manufacturers. Retailer reward programs generally
carry a discount of around 10% on any purchases made with the
card at their stores, though there may be some exceptions on
certain items. Manufacturer discounts are generally offered by
manufacturers of high-cost items such as automobiles or other
vehicles and offer a discount whenever you purchase one of their
products. Some models of products may be excluded from this
discount.
Free Gifts
Slightly less common as a rewards programs are those that grant
free gifts based upon use of the card. Each time you use the
card, you'll get a number of points from the store or company
that the card is linked to which can later be redeemed in lieu
of cash. Some retailers, online companies, or catalogue sales
companies will offer this sort of rewards program, enabling you
to get certain items for free after you've built up enough
rewards points on your card.
The specific items that reward points can be redeemed for in
this manner may vary from one company to the next... in some
cases it is only certain items that can be purchased this way,
whereas in others you can get any item that the store or
retailer has in their stock.
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