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Rewards Cards-Just the FAQS
Written by: Andrew Manter
Rewards Cards-Just the FAQS
If you're like most Americans, you probably use your credit card on an almost daily basis-you may as well be rewarded for your regular patronage. A rewards credit card can make that old "spend money to make money" adage a reality. Here are a few tips for sorting through the barrage of credit card offers in your mailbox and finding the one that works best for you.
Q. What kind of rewards are available for earning?
A. There are several categories of rewards cards, so you can choose a plan that best suits your lifestyle and spending habits.
General-one of the more flexible rewards cards, this option allows you to earn points from most type of purchases and then use them however you like, on anything from merchandise to dining out to event's tickets.
Cashback-as the name suggests, this type of card repays you for frequent usage in cold hard cash.
Airline rewards-this well-known type of rewards plan gives you the opportunity to earn free travel on major airlines.
Hotels-hotel rewards cards allow you to spend your points on overnight stays in swanky joints like the Hilton.
Gas Rebate Cards-As gas prices steadily rise, a gas rebate card may provide you with some small consolation. Each time you swipe a gas rebate card at the pump, you earn a rebate, which is then credited to your account. Unlike with cashback rewards cards, you'll see your rebate monthly rather than annually. Depending on the card, you may have a choice between a rebate in gift card form or credit added back to your account. Some gas rebate cards require loyalty to a certain brand. Others will reward you for purchases at any gas station.
Q. How many points/miles do I need to earn before I can redeem a reward?
A. As you're comparing cards, you may find that one offers 10 points per dollar but demands 100,000 before you can cash in. Another card may offer 1 point for the same dollar but will allow you to redeem your points as soon as you reach the 5, 000 mark.
Q. What fees are associated with rewards cards?
A. Annual fees can range from $0 to $100. When looking for the right rewards card, take a moment to calculate how many points you think you'll earn per year. For example, your hotel rewards card has a fee of $100 and you think you'll only earn a single overnight stay per year. That probably isn't worthwhile. On the other hand, if you think you'll earn 4 or 5 free nights each year, that same plan becomes a great deal.
Q. How many points/miles do I earn per $1 of charges?
A. A card may offer you higher points per dollar during an introductory period and then drop to a lower rate when this intro phase has come to an end.
Many cards offer more points to the dollar when purchases are made at a certain type of location, like drugstores, restaurants, etc. your goal should be to find the credit card that will repay you for just doing what you normally do.
Q. Do points/miles expire?
A. A good rewards card will allow you to your retain your points indefinitely unless your account has been inactive for an extended period of time.
Some airlines cards do have blackout dates-look for a card sans these limitations.
