Reward Credit Card

A reward credit card is a typical credit card, but it will give you various rewards for spending on the card.  When you charge on the card, you will earn points or cash back, depending on what type of reward credit card you carry.  The amount of cash back or points you receive is determined by the amount that you charge on the credit card.  After you accumulate a certain amount of points, you can exchange them for things such as air miles for airline tickets, gas, and discounted or free merchandise.  A cash back credit card will give you a certain percentage of cash back for every purchase you make on the card.

A reward credit card is very popular these days, as around 50% of all credit cards are reward type credit cards, according to Mintel’s Compermedia.  Many times, a credit card that gives rewards does not have an annual fee attached, but has a higher annual percentage rate (APR).  Generally, the APR for reward credit cards is around 14%, compared to around 10% for non-reward cards.  A credit card that gives rewards can be very beneficial for people that are frequent fliers/travelers and who spend a lot of money on their credit card.

When you choose a reward credit card, you should pick a card that fits your way of life and your credit card spending habits.  You would not choose a travel reward card if you do not travel often, because rewards programs for travel require that you accumulate a lot of points before you receive free travel.  If you are a frequent flier/traveler and spend a lot of money on your credit card, a travel reward card is a good option.  You will not only receive free air tickets, but also can receive free or discounted hotel accommodations and rental cars.  If you use one airline often, you should look into an affiliate airline credit card.  Many of the major airlines offer this type of reward card.

Another type of reward credit card that is very popular is a gas reward card.  This type of credit card will give you discounted rates on gas and free gas, depending on how much you spend on the card.  If you spend a lot of time driving, then a gas reward card is a good option.  With the prices of gas these days, it is a very good option as you spend a significant amount of time in your car.  You can get a gas reward card from an affiliate gas station such as Shell or Chevron.  You can receive free or discounted gas with every purchase you make on the affiliate card and not just when you buy gas.  For example, if you purchase a computer for $1,000 with your Shell gas reward credit card, you will receive a certain amount of points giving you free or discounted gas.  Many of the larger gas station chains offer a gas reward card.

There are also affiliate department store reward credit cards where you will earn points when you spend at a certain establishment.  This can be beneficial if you shop at one store often.  For example, if you shop at Sears a lot throughout the year, you can receive points for free and discounted Sears merchandise every time you charge on your credit card when shopping at Sears.  Many of the larger department store chains have credit card reward programs.

You can also get a general cash back reward credit card that will give you a certain percentage of cash back every time you charge on the card.  This is regardless of where you make the charges and what you buy.  At a certain time, this depends on the cash back card you have; you will receive a cash back bonus depending on how much you charged on the card.  These kinds of reward cards are good if you spend a lot on your credit card.

Before you choose a reward credit card, you should do some research.  There are restrictions involved; there may be a limit on the rewards you can receive, and there may be a timeframe for the collection of points.  You can get a reward card that is right for your situation that has reasonable terms.  Make sure you read the entire credit card agreement so you know the particulars about that reward credit card.