Introduction
A reward credit card is a credit card that has a reward program upon spending a certain amount of credit.
History
The history of reward credit cards run way back to the late 1800s customers could earn S&H Green Stamps after making purchases from S&H Company. The earned stamps could then be redeemed for products from the company's catalog or at the local Green Shield shop. Airline companies also engaged themselves in the rewards programs in the 1980s where people who flied frequently were awarded with free airline miles. Since 1980s when Credit card companies adopted the reward program, over 60 percent of all the issued credit cards in the United States are linked to a rewards program.
Features
Rewards credit cards have had increased use by Americans to supplement their shopping, travel, and their day to day expenses because of the "cash back" idea which according to a new survey by Capital One (NYSE:COF), it is a top motivation factor for consumers’ using rewards credit cards. Reward credit cards can be an interesting way to earn something back on your expenditure. These cards provide convenience and benefits as normal credit cards along with a chance to free flights, hotels, meals and more. The rewards from these reward credit cards are tied to the amount spent for example, for every dollar spent, a reward credit could earn you two miles or for every dollar spent, you earn two points toward hotel stays. Rewards credit cards have benefits and limitations which vary from card to card and it will be essential if tips below are properly followed by a customer before settling on a certain reward credit card.
Tips and comments
Search through and compare
It is always advisable to search through various reward credit cards before choosing on which one to settle to. Being loyal to a certain reward credit company may not be advisable when you want to make value for your money since a better option may be available in the market but you are not ready to move from your reward credit card. Comparison of rewards credit cards is a good way to see up front which rewards credit is right for you. There are various sites on line that can help you in comparing the reward credit. Before you choose the best reward credit card it is also important to keep in mind which rewards are most meaningful to you depending on how you spend your money. This is because different reward credit cards have varying rewards some of which would not be favorable to you. Every six months, the Federal Reserve publishes a survey of credit card terms and a look at the site may be helpful.
Credit score
Maintaining a good credit score will give you an upper hand while choosing for a good reward card. Most reward credit card companies reserve their rewards credit cards for good credit customers. Paying your balance in full each month it will ensure that the high interest rates in these reward credit cards will not affect you and you will gain some cash back with the rewards. It should be noted that the rewards gained from these reward credit cards can not be compared with the above average interest rates that they come with.
Read the fine print
It is very important to take some time to read through the fine print. This will help you in knowing what you are getting into and in knowing the terms and conditions involved like the minimum limit of points one should earn before claiming a reward, after how long do the rewards expire when not claimed, the fees associated with the card (APR, annual fees, over limit fees etc)
Customer support
Good customer service is a must which must include telephone customer support to emergency card replacement. This is important because you can be in a fix and lack the necessary support
Comments
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