Credit Card Rewards

Credit Card Rewards: Your gateway to riches?
Banks are there to make money and build relationships - what better way than through credit card rewards? These rewards and incentives are ways to make you spend more on the credit card. The rewards could be in terms of frequent flyer miles, reward points that you redeem for purchases, or even subsidies on gasoline. Nonetheless, these rewards do offer some benefits to the consumer.

Vacation easier
Credit card reward points are a great way to help you save on airline ticket costs. Many cards even offer free hotel stays, free entertainment and sports activities, gas cards that provide you with free gas, even cars that you get to rent for free.
Fly for free
Most of the hotels and big travel agencies have tie ups and partnerships with reputed credit card companies. Especially if you’re a frequent traveler or spend large amounts regularly, you get regular incentives and rewards from the bank. For example if you fly across the globe on a regular basis, the credit card company provides you with frequent flyer miles. These miles can later be redeemed against the cost of other airline tickets. Thus it can save you a significant amount of money.
Travel packages
As far as stays in hotels go, many credit cards will provide you complimentary vacation packages as well. Sometimes it could be for 2 days and 3 nights to a popular tourist spot. It could also include free meals or stay at a big hotel.
Free movie tickets
Credit card rewards might also include free tickets to a cinema hall for the latest blockbuster movie.
Happy birthday!
Yes, many credit card companies will note down your birth date. Subsequently every year, they will send you complimentary gifts – it could be a gift voucher of a popular shopping mall, a fancy birthday cake etc.

Credit card rewards: Customer relationship building
Credit card companies have realized that in today’s tough competition, if there’s one thing that matters, its customer satisfaction. This is quite difficult to come by, considering the gamut of choices customers have from credit card offers. That’s why banks try their best nowadays to go that extra mile to please their customers. The bottom-line is to enrich the personal experience of their customers – be it in terms of making their birthday a little more special, or a vacation that much more fun.

High spending patterns
However, just like all good things, even in the case of a credit card reward, there is always a ‘catch’ involved. Usually banks will offer reward points, frequent flyer miles etc. only to those customers that usually spend a lot on the card. They will have a cap on the amount spent. One needs to spend at least a certain amount to be eligible for earning points. For example there are cards which provide 1 point for every 1 dollar of purchase made on the credit card.

Expiry date
Also, another thing with these reward points and frequent flyer miles is that these come with an expiry date. Most frequent flyer points need to be redeemed within a certain period – else all those points are gone to waste.

Terms and conditions
Many credit cards that offer rewards often come with certain terms and conditions. Also these rewards may not be used in other countries. Most of the free stays at hotels will only be applicable for a select set of hotels. Usually these hotels will be very expensive by default. That’s how the credit card companies more than recover their costs.

Credit card rewards are feasible for those who travel or purchase a lot; for others it might involve more spending vis-à-vis being rewarded.

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CREDIT CARD TYPES

Choosing the credit card that's best for your needs and situation starts with knowing what options are available to you. The following list details the most common credit cards available:

	Balance transfer credit cards - Balance transfers are a way of transferring outstanding balances from existing credit cards to another card that offers a lower interest rate. For example, if you your have a high annual percentage rate (APR) credit card with a significant outstanding balance, you can transfer the balance to another card with a lower rate or even one offer zero interest. Typically these cards offer low balance transfer rates for a specified period of time allowing you to save hundreds (or even thousands) of dollars in monthly interest charges.
	Low-interest credit cards - These cards offer a low introductory annual percentage rate (APR) for a promotional period, after which they can change to a higher rate or a fixed-rate. If you plan on making a large purchase, it's a good idea to pick up a low-interest credit card to take advantage of the savings on interest during the introductory period.
	Cash rebate credit cards - Cash rebate cards accumulate "points" for1 every purchase you make using the card. Most cash reward cards award a point based off 1% of the purchase total, excluding interest and finance charges. For example, if you make a purchase for $1,000 the credit card will award you with 10 points (or, $10.00). These cards are great for loyal customers who make payments on-time every month.
	Reward credit cards - Reward credit cards are similar to cash rebate credit cards, but differ in that they offer various forms of "rewards" for the purchases you make. For example, you can accumulate rewards for frequent-flyer-miles, free magazine subscriptions, and even hotel and travel discounts. Ideal for those who enjoy getting something for free from their credit cards.
	Travel credit cards - Travel credit cards are ideal for the frequent flyer who travels the globe on a frequent basis. These cards accumulate significant reward points every time you make a travel-related purchase. You can gain discounted airline tickets, rent cards for free, and even get discounted hotel rates!
	Pre-paid credit cards - Pre-paid credit cards are ideal for those who are on a tight budget and don't want to fall prey to the financial pitfalls associated with standard credit cards. They work similar to gift certificates or debit cards. You deposit money into the card and then use the card to make purchases as you would a typical credit card.
	Secured credit cards - Secured credit cards are ideal for people with poor or no credit. They work on a collateral system, where you put up something of value against the debt on the card.