Rewards programs are one of the most common ways that credit card companies allow their customers to get the most out of the money that they spend. There are several different ways that you may earn cash and bonuses by using rewards credit cards. Let’s take a look at the different types of rewards credit cards that are available.
Cash Back Credit Cards
A cash back credit card can be a great way to save a lot of money. These cards are perhaps the simplest of all rewards cards. With a cash back credit card, you are given back a percentage of the money that you spend on your credit card each month. There are some differences between the different types of cash back cards. Some of them may offer more money back on different types of purchases. Others will offer you more cash back once you hit higher tiers of spending. However, many of these cards also have recurring annual fees. Be sure to check what kinds of fees your card has before you commit to it.
Points Credit Cards
Points cards are different from cash back cards in that instead of giving you cash back, you’re given points that can be exchanged for goods and services. Although the points roughly have some cash value, you may be able to get more for your points from certain companies that the credit card company has in their catalog. You can often use your points for things such as gift cards, phones, gas and plane tickets. The terms of these cards can vary greatly. Make sure you know whether or not your points expire. Additionally, although it isn’t as common of a practice as with cash back cards, you may be charged an annual fee with a points credit card.
Travel Credit Cards
Hotels, restaurants and airlines have worked together with credit card companies to make some great deals for frequent travelers. You may get cash back, points or discounted rates with specific hotels. Many hotels even offer their own cards as an incentive to stay with that chain wherever you travel. Like cash back cards, these cards also commonly come with annual fees.
Retail Credit Cards
Many major retailers offer their own credit cards. This can be a great deal if you frequently shop at a specific chain. These cards will typically give you points or cash back that can be redeemed at their stores. Additionally, you will often be rewarded with extra cash back or points when buying things from their stores. Although there are fewer annual fees with these cards, many of them have high interest rates.
Rewards credit cards are a great way to help you get more value from the money that you spend. Although annual fees may negate the value of these cards for some consumers, many people can save a huge amount of money with them. Before getting a rewards credit card, carefully consider your spending habits to make sure that you will be getting the most out of it.
