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Types of Rewards
So, you've finally gotten yourself a reward credit card. Do you know what kinds of rewards your credit card allows? Do you have any idea how you're going to receive your rewards and how much of a reward your credit rewards card offers? Let's look at some of those questions and see if we can find some answers to them and other questions dealing with types of rewards for reward credit cards.
Cash Back Rewards
Some rewards credit cards offer to give you money back on either all of your purchases or on certain types of purchases. Others offer to give you a certain amount of "points" per so much money spent using their rewards credit card. For example, the Capital One No Hassle PointsSM Rewards gives you 5 Points per dollar spent at gas stations, major grocery and drug stores while allowing only 1 point for every other type of purchase. There is no limit on the accumulation of points and the rewards last for the life of the card. The cost of the card is currently $29 per year. So, if you want to earn points for gas, groceries and prescription drugs or drugstore merchandise, you might want to consider this card….if you're going to be spending in excess of $1,000 a year to make it worth the cost of this rewards card. Also…how much are the points worth? Look in the "terms and conditions" area of the application to make certain of this, otherwise, a "point" may wind up being no more than .50 cents or less. The "points" value is where they get you. For instance, you've spent more than $30,000 on your rewards credit card over the last 10 years and you look through a catalog of items that you can purchase with your points and find out that you can actually get a $50 box of name brand golf balls for your points. In a case such as this, the point value is not very good. If, however, you find that you can get a week's stay at a Holiday in near the entertainment complex in Orlando, you've struck gold. Keep this in mind when you're looking at rewards credit cards.
The Discover Open Road Card actually offers a 5% to 20% cashback bonus at "top line" retailers. Again, read the small print carefully. If you consider a "top line" retailer to be your local homeowned clothing store and you expect to earn cash back rewards, you may be disappointed when the clothing store is not listed as one of the retailers that Discover recognizes as a top liner. Make sure that you know and understand each of the "terms of service" that you're getting into before you actually apply for the card.
Also, consider this: if you don't pay off your card every month, what good is getting cash back as your reward going to do you? Very, very little so don't get a card thinking you're going to get rich with it.
There are numerous "cash back" cards out there. Practically every credit card company offers one or more of them. They can bring you some serious savings or they can just be a lure for your business. Read the "terms of service" and make sure you know what you're getting into before you accept a card from any rewards credit card company.
Travel Rewards
If you are looking for travel rewards credit cards rather than cash back rewards credit cards, you should know that you can choose from airline miles, hotel stays, car rentals or cruises as your rewards, depending on the particular credit card company and the specific rewards credit card they offer. Some of the cards offer travel with the freedom of no blackout dates and no restrictions while others definitely have restrictions. For more information, see our section on Travel Rewards.
Airline Miles Credit Cards
Several of the major airline carriers offer airline miles credit cards. Your rewards simply consist of airline miles that are awarded to you based on the amount of money that you spend on the rewards credit card sponsored by that carrier. For instance American Airlines offers an airline miles credit card, as does Continental Airlines, Delta and even Southwest Airlines. If you fly one or more of these carriers frequently, you can gain rewards by using your miles rewards credit card from each carrier. Some rewards credit cards that are not airline carriers sponsored actually have partnerships with some of the major airlines. Several of them have multiple partnerships and offer airline miles rewards from several popular carriers. One such card is the American Express Preferred Rewards Green Card which offers mileage rewards from Delta Skymiles, Continental OnePass, US Airways Dividend Miles, Jet Blue, Aer Lingus, AeroMexico, Air Canada Aeroplan, Air France, Air Jamaica, Alitalia, ANA, Cathay Pacific, El Al Israel Airlines, Frontier Airlines, GlobalPass, Hawaiian Airlines, LAN, Mexicana, Qantas, SONG, South African Airways, SouthWest Airlines, SwissAir and Virgin Atlantic among others.
Some of the airline rewards cards actually allow an exchange of miles from one carrier to another. This is a huge advantage if you fly frequently but use numerous carriers for your travel. One such company is American Express with their Starwood Preferred Guest Card. The Starwood Preferred Guest credit card allows you to earn one point for every dollar you spend on "non-Starwood purchases". Therefore, you do not need to be a Starwood frequent guest to get this card.
Gas Station Credit Cards
There are several rewards credit cards that actually save around 5% on gasoline purchases by giving rebates. There are oil company specific rewards cards and there are also non-specific gas company cards that still pay rebates on gas purchases. The minimum rebate offer that you should accept is 5% as this is the going rate at this time. Some oil/gas company rebate credit cards are:
The Discover Open Road Card
American Express Simply Cash Business Card
Chase BP Visa Rewards Card
Hess Visa Platinum
Shell Mastercard
Chase Marathon Platinum Card
Hotel Credit Cards
A few of the major hotel chains offer "frequent guest" credit rewards. Obviously, these do not do one a whole lot of good unless they are, in fact, frequent guests of specific hotel chains. A few examples of such cards are the Hilton Hhonors Credit Card and the Marriot Credit Card. Both offer frequent stayers some decent rewards for their loyalty. The ultimate best general credit card for accumulating rewards for hotel/motel stays is the American Express Blue Card. This card has more travel associated partnerships than any other card and you can either exchange membership reward points for frequent guest points, gift certificates or checks or for one night's stay. A few other cards in this category include Trip Rewards MasterCard®, Choice Privileges Visa® and Starwood Preferred Guest Credit Card.
Retail Credit Cards
Many well-known retail stores and chains offer rewards credit cards, business credit cards, travel rewards credit cards, cash back rewards credit cards and even frequent flyer rewards credit cards. Some only allow earning of points or rewards from their particular retail store while a few of them are happy just sponsoring the card and use it for advertising, thus allowing points earned for a variety of other stores or retailers. Most people who shop at particular retail outlets will find great advantage in these types of rewards credit cards as they will gain rebates on merchandise or other types of rewards for using the cards in their local specific retail location. This can save them a lot of money or can reward them in other ways that the customer prefers. There are many of these types of rewards cards and a few examples are Chase Amazon.com Platinum Visa® Card, Starbucks Card Duetto™ Visa and Circuit City Credit Card.