Reward Credit Cards

Credit card companies understand that everyone likes to be receive rewards.  They have created hugely popular rewards programs that offer incentives for consumers to remain loyal to one credit card.  This concept is not new and was first introduced to consumers in other industries as early as the late 1800’s.  Today loyalty or reward programs are offered by credit card companies, airline industries and grocery store chains across the nation.

What Are Reward Credit Cards?

The first rewards program offered by a credit card was introduced by AT&T which provided cash back on purchases that could be used toward the account holder’s phone bill.  In the late 1980’s Discover got on board when they rolled out their cash back program which made it possible for card holders to receive money at the end of the year based on the total amount of purchases charged that year.  Today there are hundreds of credit cards offering rewards programs to encourage consumers to use their card exclusively.  The rewards programs are as varied as the consumer who use them.  The rewards can range from cash back, airline miles and credit toward merchandise or meals at restaurants.  In most cases consumers receive rewards based on where they use their card and how much money is charged for purchases.

How To Use Reward Credit Cards.

Before applying for a rewards program, it is important to first find out how the program fits in with your current spending habits.  Choose a card that best reflects your habits as well as one that offers rewards you can actually use.  Consumers benefit most from programs that reward them for purchases they would routinely make regardless of whether or not they had the rewards card.  After you determine which program best suits your current needs, you simply use your card as you would normally and watch your rewards grow.

The Downside Of Reward Credit Cards.

While it is true that rewards programs are extremely popular among consumers who benefit from the programs, they are not for everyone.  In fact, using a rewards credit card can end up costing some people more money in the long run.  Credit cards which offer lucrative rewards programs often come with higher interest rates than credit cards without a rewards program. This make is an unwise choice for consumers who do not routinely pay off their balance each month.  A small percentage of rewards cards charge an annual fee which may reduce the overall “reward” of using that particular card.  In addition to annual fees and higher interest rates, many rewards programs can be confusing at best.  If you are not organized and willing to track your purchases and pay attention to how and when your rewards are available you may find you are unable to claim your rewards before they expire.

Generally speaking, reward credit cards are a great tool when used properly and by those who qualify for the program.  Consumers who lack the ability or discipline to manage their credit cards responsibly will not reap the rewards of most programs regardless of how much money they spend.  To get the most from your rewards card, you must fully understand how the program works, how you build rewards and the proper procedure to claim your rewards.  To find the best reward credit card, shop around and carefully compare each program to find the one that best reflects your needs.