Why use credit, when you've got cash? It used to be wiser to pay in cash, unless you were paying for a pricey item and you didn't want to be bringing that much money around. The high interest rates imposed in using credit cards have discouraged many a client from using them. But now, credit card companies have come up with an incentive for using credit – the rewards card.
The rewards card is used to attract people to use the card often. In return for purchasing items or services with your card, you earn points, which accumulate to a certain number until you become qualified to get rewards. Banks want people to continue using their cards so that they'll also continue maintaining their account with them and of course, paying the interest.
A comparison of the various existing rewards cards show that your choice of a card could depend on the rewards being offered. Rewards can be in the form of discounts at certain stores or at gas stations. Perhaps one of the best, if not the best, rewards is the cash back reward. When a client reaches a certain amount of purchases, the card company will reward him with cash.
- Another common reward is a travel package, usually acquired if you have an air miles card. If you get to fly a certain number of miles, you'd get a free ticket to some destination, and sometimes you can even bring a companion along! Canadian Air Miles is an example of this kind of rewards program. The miles could also be exchanged for rewards other than travel, such as entertainment and merchandise. An Air Miles loyalty program was also established here in the US, but it was short-lived. If you do not travel a lot, then it is not advisable to opt for an air miles card.
- Some cards also reward you for buying at particular establishments, such as the Best Buy Reward Zone MasterCard from HSBC, which can earn you 4% if you buy at Best Buy. These earnings will then be translated into gift certificates that can be used at Best Buy stores.
- Capital One has revolutionized the rewards card incentive program by allowing its users to convert their rewards into contributions to their favorite charitable institutions. Now charity has been made easier by rewards cards!
- The American Express Preferred Rewards Gold Card gives a membership point for almost every dollar you spend. These points can be redeemed through travel and shopping rewards. The MasterCard Rewards Card has similar features, and even allows students to use the rewards to pay for their school debts.
The cards mentioned here are just the tip of the iceberg. There are many more rewards cards out there and you can choose from any of them. Just remember to select one that offers rewards you can and will actually use. Enjoy!