Friday, April 19, 2013

How Credit Card Reward Programs Can Help You Save Big

In today’s consumer-driven society, few people in the United States do not use credit cards on a regular basis. Credit cards have been increasingly prominent in the U.S. economy since the late 1970's and the concept of making purchases with a credit card dates back further than that. 

In recent years, credit cards have received a negative reputation due to the high levels of debt carried by many Americans and the fees and penalties card companies often impose. However, credit cards, especially rewards cards, can provide benefits far greater than the potential downsides if handled responsibly. 

To compare the top reward credit cards, utilizing comparison sites like www.ratesupermarket.ca can be very helpful. Comparing rewards, rates and understanding introductory periods can go a long way to helping you utilize the convenience of using a credit card, without offsetting the savings by tricking yourself into spending too much, too often. 

Background of Rewards Credit Cards 


Although credit cards were given to consumers far more freely prior to the market downturn in 2008, it is still fairly easy to secure credit so long as your credit history is not poor. Many different kinds of cards exist, but the card the average consumer will find to be most beneficial is the rewards card. Many different companies and banks offer rewards credit cards with a variety of different perks and privileges. These cards allow consumers to earn points, miles, or percentages off purchases with frequent use. 

Credit card companies benefit from these rewards cards as well: since customers are encouraged to pay with their credit cards to earn rewards, companies receive higher amounts in fees from their vendors with the increased use. The best cards are often only available to those with a high credit score, so be sure to keep an eye on your credit if you are hoping to earn big rewards from your purchases. If you have average credit, however, this does not mean you will not be approved for a rewards card. Many different rewards cards exist with varying credit expectations. 

Kinds of Rewards Cards 


Rewards credit cards come in many different varieties. Some are store- or vendor-specific, meaning that the rewards customers can earn are only valid at the retailer the card comes from. Some cards offer specific rewards, like airline miles that can be redeemed for flights. Other cards can be used anywhere and points can be accrued with use anywhere, but purchases at certain retailers can earn further rewards; for example, some cards offer more points when purchasing gas and groceries. 

With most cards, points earned for making purchases can be redeemed for cash, gift cards, or merchandise at the user’s discretion. Some cards offer rewards with any number of points, while others require you hit a certain benchmark. 

Differences Between Rewards Cards 


Some rewards cards are better than others, and the value of the rewards a card offers may relate directly to your personal situation. For example, if you fly frequently for personal reasons, an airline rewards card might make the most sense. If you do not have a specific use for a card in mind, it is best to find a generic rewards card geared toward your spending habits. 

Some cards offer double or triple points on purchases at commonly-used services like gas stations and restaurants. Other cards offer high rewards on certain purchases that rotate throughout the year. Evaluate your own spending habits and search for cards accordingly. Many credit card research sites and forums exist online that can help you compare cards, see what cards your credit score may qualify you for, and get feedback from current customers. 

Conclusion 


There are plenty of necessary expenditures consumers have to make every month, from rent to gas to groceries. When used responsibly, credit cards can be a great tool in helping with your monthly expenses and even building credit. With rewards cards, you can earn while you spend. If you have to spend regardless, why not get a little money back while you do so?


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