How Rewarding are Reward Credit Cards?

Summary: This article describes the difference between reward credit cards and the different types of rewards that they offer.

Who dislikes bonuses? People are often enticed by attractive bonus offers and credit card offers are no different. Shrewd credit card companies are using lucrative credit card rewards to lure new customers in and sustain existing customers. Reward credit cards offer several key features that attract more customers into the fold. As a potential customer your duty is to distinguish between those genuinely beneficial reward credit card offers and those less promising reward credit cards. Many credit card issuers do offer a variety of rewards programs, however, they also find an innumerable number of ways to make up for those reward payouts with fees and charges that unsuspecting customers sometimes overlook. Reward Credit Cards If you are in the habit of paying off your balance each month, a reward credit card is ideal for you. Reward credit cards offer myriad rewards for using their respective cards. You can very easily earn reward points for merely making purchases with your card as well as a host of incentives that are offered in the form of additional redeemable reward points. As you might suspect, card issuers and banks offer starkly contrasting reward redemption options. Credit card issuers give you the option to redeem your points in a variety of ways. Some cards give you an option to use your reward points on other purchased items. Some reward cards offer redemption toward free travel on specific airlines, discounts on merchandise, gas rebates, free entertainment discounts, movie tickets, or even straight cash back rebates. You can even earn a substantial discount on your next automobile purchase from some reward credit cards. Difference between Reward and Cash Back Credit Cards Reward credit cards and cash back credit cards are very similar. However, they have several distinct features that differentiate one from the other. Quite simply, a cash back card earns you a cash back rebate that is issued in rebate check increments of $50 to $100 or as credits back to your unpaid card balances. A reward card earns you reward points that can be redeemed on a variety of products and services, however, most reward credit cards will limit the range of merchandise and services to a few select companies. Increasing Your Reward Points If you are married, you may request an additional reward card for your spouse this enables you to increase the amount of purchases from both you and your spouse. More than likely, you have monthly bills to cover such as gas, water, electricity, trash, phone internet and cable service. And do not forget about the mortgage or rent payment. There are several reward credit cards available currently that allow cardholders to pay these monthly bills and earn reward points in doing so, a very enticing reward program. Be sure to first with your utility service providers, landlord or mortgage lender about making your monthly payments by credit card. But you should make sure that there are no added transaction fees for paying the bills in this manner. You can also use your reward credit cards to pay for your groceries instead of paying by cash, debit card, or check. This way you can dramatically increase your reward points much faster than just using the card for large purchases. With all of that said, keep in mind that you must be absolutely sure that you pay off your card balance each and every month and painstakingly avoid carrying any sort of card balance on reward credit cards. Carrying a balance, in many cases, will completely negate the benefit of the reward points that you earn with finance charges. To summarize how to properly use a reward credit card, you should only use a reward credit card if you expect to pay off the balance each month. Second, be sure to select a card with a variety of reward options so you can enjoy more flexibility when you redeem your points. And lastly, always be sure to redeem your reward points before they expire, which happens to be another common pitfall of reward credit cards.