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When you have to buy something anyway, it’s always nice to feel like you’re getting something back for your trouble. Rewards credit cards let you do that. For every purchase you earn points or cash back on your purchase. You can combine your rewards card with other online programs to double up on the rewards. When you really use the rewards programs, you can even get large ticket items comped, like a long hotel stay or even your entire vacation.
Rewards come in three basic types: cash back, miles or points. Of course, you can spend cash on anything you want, but the same is often true of points. You can redeem your points for everything from travel to gift certificates, and you can often earn points faster than you can get cash back. Most cash-back offers top out at 3 percent per dollar spent, but depending on the points offer, you might collect as much as 5 points per dollar. With some rewards points, you can even exchange them for cash back. With miles, you can exchange them for airline tickets. How many miles you need to spend per flight can vary depending on the program, but some will let you convert your miles to use with different airlines. You might lose some miles in the swap, but it does expand your reach and let you take advantage of different programs.
How you use your rewards is a personal decision. Some people really enjoy getting cash back and use it as a kind of savings plan. However, you should pay attention to the way your credit card perks work with each card, since some will only issue the cash back as a credit on the account. Other programs only allow cash back spending on gift cards. If you want a check in the mail or deposit, you’ll need to make sure that it is an option with your rewards card.
Other people really want to accrue rewards points that they can use for airline tickets or gift cards. Popular gift cards are virtually the same as cash, but they remind you to spend the money on something fun. If you want to use your credit card rewards to relax and enjoy an hour, a day or a week, then either type of reward can be a good bet, so it all depends on what you prefer. Also, sometimes you can get gift cards at a discount on face value.
The better your credit score is, the better rewards you can get from a credit card, so make sure your credit score is as healthy as possible before you apply for any credit cards. If you need help cleaning up your credit report, you can look at any of the many credit repair companies that adhere to the government guidelines about credit repair.
What you enjoy can play a big role in what rewards you might want. Choosing a rewards card that has no annual fee may impact the speed at which you accrue rewards. For example, if you have a cash back reward, you might get a higher percentage when you have a card that charges an annual fee. With a points-based rewards system, you might earn points on more purchases or find that it costs fewer points to buy desired rewards. But, you do have to spend a lot on your rewards card to earn enough cash back to amount to much. Remember, if you’re only earning 1 percent on purchases, that’s only $1 per $100 you charge to your account.
Some of the most popular rewards tend to be either travel or cash back. Depending on the type of reward, you could swipe your card without worrying about the bill or even book a hotel or flight using points. With airline miles, rewards can be a little bit more complicated. Airline miles are often the first thing that come to mind when you hear travel rewards, but travel rewards aren’t limited to miles anymore.
Points rewards often include some of the most unusual redemption options. You can get everything from physical merchandise to special event admissions. Depending on the program, you could buy tickets to gala events or even things like Super Bowl or World Series tickets. It all depends on what you’re interested in. Every point-based rewards system has an online shopping mall that carries a variety of merchandise. You might see things like expensive consumer electronics or designer bags, or even household goods.
Rewards credit cards can give you a little something back on the purchases you already intend to make. You get the same rewards if you pay your balance in full every month or if you carry a revolving balance. You may get bonus offers for additional rewards if you spend more on your card within a set time frame. You’ll also want to make sure that your points or other rewards never expire. Some rewards programs change redemption options on a regular basis, while others require you to use your points within a set time frame. Also, check on any minimum redemption amounts that can force you to hit a large dollar value before you can get anything with your points/miles or even cash back.
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