Credit Card Rewards
The benefits of credit card incentive programs
We use credit cards every day as part of our daily spending habits. Why not get rewarded for what we spend? Credit card rewards are a nice perk of using credit — they allow you to accumulate points or get specific benefits when you use your credit card. Whether you have a low APR credit card or you're a student with your first student credit card, credit card companies have recognized the value of keeping their customers happy by offering rewards and incentives. Here's a list of some of the ways you can benefit by using credit and earn more towards what you really want.
Types of Credit Card Rewards
There are many different types of cards, and they all include some benefit to using credit, whether they help you fix bad credit or offer you a low interest rate. Rewards cards, however, offer you a specific incentive. These types of cards include:
- Business reward credit cards. These offer specific incentives that benefit businesses. For example, they may offer lower interest rates or air miles to be put toward business travel.
- Credit card reward points. These types of cards offer points that can be redeemed for goods and services. For example, some points can be put towards merchandise at participating stores, while others can be added up to buy the credit card user a special experience or limited edition item.
- Gas reward credit cards. These cards allow users to accumulate points when they use their card at a gas station. The points may be put towards merchandise and other items or can be redeemed for savings on gas. With the price of oil going up, this can be a good reward for anyone who uses their car a lot.
- Student prepaid credit cards. These cards will often carry rewards that are student-driven. Students can accumulate points toward goods and services they use every day or earn credits that can be redeemed for educational costs.
- Cash back credit cards. Cash back cards allow the user to earn back a certain amount of cash (normally a dollar or under) for a set amount they spend during a specific time period — for example, $1 for every $100 spent in a single month. After a lapsed period of time, the cash can be redeemed.
Most reward cards will carry a higher interest rate than regular credit cards and may have hidden or annual fees. Ensure you do your research before applying for any card.
Whatever rewards card you choose, make sure to treat the card as you would any other credit card. The rewards of a good credit rating are far greater than most credit card incentives.