What You Need To Know About Credit Card Rewards

Do you want to earn cash rewards for your everyday purchases? There are several companies that issue incentives to card holders in the form of reward credit cards. However, some of the credit card issuers aren’t credit card companies; they can even be a mortgage lender. The mortgage lender may give out reward points to enable you to pay for a mortgage. Credit card rewards aren’t just limited to cash: there are also other types like miles and points.

Reward Points

Reward points depend on the amount you spend on each purchase. In most cases, you earn one dollar for every spending you make. However, there are some companies which increase the points to three or even four for each dollar you spend on them.

You can then redeem your points online via an online shopping catalog. You can redeem the rewards for money, gift cards or travel tickets, all this depend on the credit card company you are dealing with. In some instances, you may find it cheaper to obtain a gift card through the reward card program than going to purchase one from the store.

Miles Rewards

Miles reward credit cards are also referred as travel cards. They allow you to make transactions for every trip you make, which will later generate rewards for you. You can then redeem the miles you have earned for an airline ticket. Normally, the number of miles that you redeem is based on a frequent file program that is linked to your reward credit card.

Cash Back

These are the simplest reward programs easy to understand though most cash rewards usually don’t usually pay in cash. You can only redeem the cash rewards as credit on your credit card. The credits are usually payments on the accounts and you can use them in your future purchases.

If you receive the rewards in money form, the credit company normally makes a deposit to your bank account or sends a check. In case you choose to redeem the reward cash for paying for gift cards via the credit card company’s business partner, there is a certain amount you have to incur. For example, you may spend $30.00 of cash credits paying for a gift card or any other item.

The whole process goes around a simple cycle of spending, earning rewards and then redeeming the rewards. This is great indeed. However, as much as the whole process may look simple, there are some very important points you need to know about credit cards. You need to boast of high credit scores in order to receive the best credit card rewards from credit card issuing companies. Usually, these credit reward cards incur higher annual charges than the traditional credit cards.

Some companies issues credit reward cards for a limited period of time. This means, you may be required to use your redeemed travel card rewards within a certain specified duration of time, or else the rewards will expire.

Generally, reward credit cards are easy to understand and use and can extremely be a great benefit for you towards making your future purchases. However, you shouldn’t chase the rewards by using the reward card to earn as many rewards as possible. Just conduct your normal purchases within your capability and the rewards will generate themselves automatically. The main benefit of owning a reward credit card is the extra purchasing power you are offered. Imagine being given a free trip after redeeming mile credit card rewards. Indeed sounds awesome.

Sourced from: Alot

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Posted on May 18, 2023