For many, a major determinant in picking a credit card is the type of credit cards rewards the card offers. There is a wide variety of options available when it comes to credit card rewards, and picking the one that is right for you is largely dependent on your personality and lifestyle. In order to maximize the benefits of the rewards you receive through your credit card, make sure that the credit card you pick offers a reward program you will actually use.
If you don’t, you may find yourself with tons of reward points that end up expiring or going to waste. This is a wasted opportunity when it comes to making the most of your credit card.
The three most common types of credit cards rewards programs associated with credit cards are hotel rewards, airline rewards and cash back rewards programs.
Hotel Rewards
Hotel rewards cards allow you to earn points for every dollar or so you spend and once you accumulate enough points, you can trade them in for discounted or free stays at a hotel. Some cards are associated with a particular hotel. In this case, most often, more points are rewarded for purchases or stays at the associated hotel chain.
This allows for a quicker accumulation of points and the ability to earn more free or discounted stays more quickly. This, of course, is a huge benefit to the associated hotel as it encourages the credit card holder to book stays exclusively through that hotel chain in hopes of racking up more points. If your card is associated with a particular hotel and not a generalized hotel rewards card, make sure the associated hotel is one that you like. Look up the ratings and standards and also the average cost of a room at that hotel to make sure that you are comfortable and able to afford stays there if you hope to pick up points more quickly.
Airline Rewards
Airline rewards programs work much the same as hotel rewards programs. However, instead of earning points, you earn “miles.” These “miles” add up toward discounted or even free flights depending on how far, quite literally, the miles can take you. Airline rewards might also include free upgrades or discounts on companion tickets as well. Read the fine print to find out exactly what the credit cards rewards program is offering and how your miles convert into real travel.
Like hotel rewards programs, airline rewards programs are often associated with a particular airline. If you only prefer to fly one or two airlines, make sure your credit cards rewards program is for one of those airlines. If you’re going to be flying that airline anyway, you’ll end up racking up points much quicker as most airline rewards programs give bonus miles for purchases made toward the associated airline.
Cash Back Rewards
Cash back rewards programs work a little bit differently than other rewards programs simply because they often don’t use a traditional point system but rather offer a percentage of the amount you spend back in the form of cash. Keep in mind that some cash back rewards programs will offer you your rewards in the form of a check while others will simply put the amount back toward your credit.
There are many types of credit cards rewards programs available and understanding them all can be a bit daunting. The first step is in knowing what rewards will benefit your lifestyle the most.