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Credit card reward schemes help to create loyal consumers to credit card companies. These schemes reward them points on purchases made on credit cards and can be cashed later to pay for travel, food outlets, entertainment and more. However, some don´t always offer value since they charge high interest rates, and are used mostly by consumers who pay off their full monthly balance before incurring interest rates.
What Are Credit Card Reward And How Can You Use Them?
There are two types of reward schemes: 1) Where every purchase earns you points to redeem gifts, trips and more shopping like in retailer´s loyalty credit card reward schemes or store credit cards. 2) You get cash back for every time you spend.
There are around sixty major credit cards that offer credit card reward schemes, two thirds of, which are points based.
The trick is to choose a card for its reward scheme. Those that only charge interest, only increase your cost. Avoid those with annual fee, as it reduces reward´s value. Rewards are given to spend more, except the AOL card, where its Internet subscription discount can be earned on balance transfers too.
The Schemes Weighed Up and Top Reward Schemes
Each credit card reward scheme offers different benefits so choose a suitable one from the best options we have given below.
Some credit cards pay extra points for purchases at specific retailers. This is only beneficial for those who buy from one retailer only. Providers of this point reward schemes gain more as they disguise the reward?s value.
In Top point credit card reward schemes, rewards are paid directly, as it guarantees them custom. For Instance, The GM card, allows a $3 rebate or point for every $100 spent allowing you get a discount of up to $2,500. When buying from dealers always negotiate the price before telling them you'll be paying in points.
The alternative ? cash back: If you´re looking for something better that cash back credit cards go for these as it is the ultimate flexible credit card reward scheme. Capital One's Circle Rebate cards as well as the Blue American Express credit card pay standard 1% cash back (plus intro rates of 5% for one month or 2% for three months). If you´re not impressed go back to cash back!
The Number Crunch?
These credit card reward schemes can be rewarding if you are using a credit card for paying off your full monthly dues or using debit cards. Lloyds TSB´s, HSBC´s and other credit cards don´t have reward schemes and some offer a pittance like Barclaycard´s Nectar points offer a mere 29p and Nat West's Air miles just 47p per $100 spent. So choose reward cards that offer point´s redemption with a slightly higher value.
So if you choose BAA , when you spend $15,000 annually on you credit card you could earn up to $150 in cash or a GM credit card which pays a $450 discount, but only if you?re willing to purchase it´s high end car of course.
Now go ahead, and enjoy the benefits credit card reward schemes .
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