A rewards credit card is one that rewards you every time you use it. There are many different types of rewards – cash back cards give you cash back based on the number of points or rewards you have collected, gas cards get you rebates on filling gas, airline miles credit cards help you accumulate air mile points that can be redeemed for air tickets, and so on. Best credit card rewards are the rewards most suited for your lifestyle. These rewards cards can be issued by credit card companies or individual companies in partnership with a financial institution or a credit card company.
Let’s say for example that you have to travel to different companies on business purposes. You can buy air tickets and spend abroad using an airline miles credit card or frequent flier credit card. These spends will help you accumulate points (rewards) and you can later redeem these points for air tickets, thereby reducing the cost of your air travel. Likewise, there are different cards for different purposes and you must choose a card that is suited to your lifestyle.
As mentioned earlier, there are many types of rewards credit cards available in the market. The most popular of these are:
Cash back cards, that send you a check after you have accumulated the minimum stipulated reward points;
Airline miles or frequent flyer credit cards, that allow you to redeem accumulated rewards points for air tickets;
Gas credit cards, that get you a discount on gas or get you cash back after you have earned enough rewards points;
Shopping cards, that reward you every time you shop by getting you discounts from retail outlets.
Choosing the best rewards credit card
Choosing the right rewards card is not easy even though you have identified the type of card that’s best suited for your lifestyle. You must research online and compare which company’s rewards card is offering the best terms. Read consumer reviews as well and research the negative comments. Here are the terms that you must look for:
1. Annual fees (choose a card with low or no annual fees);
2. APR (Annual Percentage Rate) – a high APR can take away all your rewards benefits (assuming that you do not pay your bills in full and on time).
3. Is there an expiry date on redeeming the accumulated rewards? Many companies stipulate that the rewards must be redeemed within a certain period. Check whether an expiry date exists and if it does, does it reconcile with your credit card planning.
4. Look for the words “up to.” Up to 50% can even mean 1%. So, clarify all doubts while choosing your best rewards credit card.
5. Check if you have to spend a minimum stipulated amount before cashing rewards.
6. If your spending is not much, choose a rewards card that offers quick rewards.
7. Look for caps on rewards. Ensure that there are none, or if there are caps, then these should be liberal enough.
These were the different types of rewards cards and the strategies you must employ in choosing one. The best rewards card for you will be one that suits your lifestyle, is highly affordable, has no annual fees, carries a low APR and does not hamper your spending with its fine print.