Rewards Credit Cards Programs

Summary: This article describes how rewards credit cards programs work.

The very first credit card was the Diners club card, which was created by Frank McNamara in 1950. From there many companies, stores, and banks began offering credit cards. These credit cards gave the cardholder the ability to purchase on credit and pay it back at a later date with interest payments added if the entire balance was not paid on time. Not only did this give the customer the freedom to have credit, but they also did not have to carry around large sums of money and could purchase larger items and pay for them later. In 1996, the rewards credit cards hit the market. Today, you can find all kinds of rewards credit cards. Discover was the first to offer a rewards credit card, which gave the cardholder the chance to receive a percentage of their spending to be returned to them in the form of rebates. This is similar to the cash back rewards credit cards that you see everywhere. The cardholder can receive a percentage back on some of their purchases either monthly or yearly, however, you must purchase at the stores or type of stores the credit card company offers the with their cash back policy. Next, in line was Continental Airlines that began to offer frequent flier miles. Now, every airline and many major credit card companies have jumped on these rewards credit cards, each with their own special incentives to use their credit cards. For every purchase, you make with the air miles rewards credit cards you accumulate points, these points can then be transferred into air miles. The air miles can be used for airline tickets, hotel accommodations, and car rentals. Some however, only allow certain airlines, hotel chains, and car rental agencies. Many times other fees such as membership fees and higher interest rates can be applied. Be sure you learn when the points you accumulate will expire or any applicable black out dates. Many people prefer rewards credit cards that fit their lifestyle such as saving points for a trip to the Super Bowl, paying off your mortgage, visiting Disney Land, or taking a cruise. No matter what you would enjoy to do with your reward points, you are sure to find rewards credit cards with you in mind. There are however, limitations on most rewards credit cards. Once you get the most points available that is it, you are no longer eligible for the benefits offered by the rewards credit card. Another thing to consider is that all points you receive are calculated on how much you spend. The more you spend the more points you will earn. Be sure that you are not just spending to earn a terrific prize, you maybe able to purchase that prize for quite a bit less if you saved for it instead of spending more and paying interest to earn it. You will more than likely be paying more annual fees and even transaction fees to redeem your points into rewards.