A Look at Rewards Credit Cards

By: Jeremy Biberdorf


If you're at all familiar with the world of credit, and these days it's hard not to be, then chances are you've at least heard a thing or two about rewards credit cards. It's more than a little likely a friend or acquaintance may have one or that you've stumbled across an advertisement or two covering the subject.

However, many people still aren't exactly clear on what a rewards credit card actually is or whether signing up for one would be the right choice for them. The term actually refers to a credit account that offers something back to the customer in addition to just the simple use of the card itself. The type of reward a particular card can offer varies quite a bit and can come in a couple of different forms.

Airline Miles

Chances are that you've heard of cards that offer loyal users free airline miles in exchange for frequent use of their accounts, as this is typically the most popular type of rewards card. Airlines miles credit cards are typically the result of a specific air travel company teaming up with a credit company to produce a program that not only reinforces customer loyalty to each, but offers loyal customer a return on that loyalty.

The benefits vary from program to program. Many frequent flier credit programs offer an upfront air miles bonus just for signing up. Future miles are then accumulated at the rate of 1 mile per dollar spent, although some types of purchases (those made with participating merchants or industries, for example) may accumulate miles at a much faster rate. This type of card is ideal for people who are already frequent travelers, either for work or for pleasure, as it can really add up to substantial savings when it comes to travel-related expenses.

Credit Points

Some credit providers offer reward credit cards that allow consumers to accumulate credit points on their purchases that can then be exchanged for a credit toward their balance or alternatively spent on goods and services from participating retailers. The criteria involved as to what purchases count toward points earned, as well as how quickly rewards points are earned, depends on the credit company or particular program involved. However, it is typical for purchases to need to be over a certain amount to qualify toward credit points.

Discounts

Other rewards providers operate by offering customers discounts on specific types of purchases. For example, gas credit cards offer consumers a chance to shave a little off their monthly fuel bill - sometimes also on common everyday purchases like groceries and auto repair expenses. Still more programs offer special discounts or rebates in regards to specific participating retailers - perfect for credit users who want to benefit from their loyalty to certain retailers while they enjoy additional benefits attached to everyday use their card.

The type of rewards credit card that would suit you best depends on your individual needs and your lifestyle. If you travel frequently, definitely look further into the benefits attached to airline miles cards. Are you on the road a lot? Look into the different gasoline credit card plans available to you and save on a major expense. Just always be sure to read the fine print and consider the conditions attached to the cards carefully before making your final decision. Some rewards cards offer excellent opportunities to save while consolidating existing debt or reward you simply for paying your bill on time every month. When you do a little comparison shopping, you're sure to tap into any number of the incredible ways to save with today's credit card applications offer.

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