A credit card that offers you access to a lot of money and gives you extras as well. What could be better? It pays to check out the reward programs that come with credit cards.
Reward programs come in many different varieties with the big array of credit cards that are on offer these days and they’re worth studying to see which one suits you best.
If you’re looking at the top end of the market, the so-called prestige or Platinum credit cards, then you can get a reward program that gives you access to almost any form of leisure activity. These programs are personalised and tailored for your individual needs.
Variety & Reward Programs
Other cards give you instant rewards, some offer cash back depending on the frequency of your use of the card, and naturally there are the classic reward programs that give you points based on the amount of money or purchases you put on your plastic.
So who pays for all this free stuff, anyway? Generally, it comes from merchant fees. This is the money paid by service providers or shops who handle all the processing work associated with making a credit card purchase.
The Classic Reward Program
The reward program most card users are familiar with is the classic program in which you are awarded points corresponding to the number of dollars you spend with the card.
When you reach a specified threshold, the points can be traded in for rewards like discount vouchers, special products and the like.
The real benefit of the classic reward program is for people who pay off their monthly credit card statement in full each time. That way, they acquire a mounting pile of reward points without running up a bigger and bigger interest debt on the credit card.
The trade off is that credit cards with classic rewards tend to charge higher interest fees than other cards.
Is the Reward What You Really Want?
When making your credit card decision, it helps to check out whether the reward the points you’ve gathered will give you is what you really need or want. For example, if you hate travelling and would rather stay home with the cat and your garden, then getting a lot of air points is not much use to you. Or if you think modern films are a load of over-hyped rubbish, then getting a bunch of free movie tickets will not be to your taste.
If that’s your personality, then you might be better off looking at a cash back card. The value of the cash you get back may be less than the value of the reward you get from a reward points card, but it does give you the extra flexibility of when and what to spend the cash on.
Instant Rewards
A few cards offer instant rewards in the form of discounts or free upgrades provided you pay with the card. Provided you use your card often, this is the best option for you among all the reward programs out there.
