If you are thinking of getting a new credit card, you should first consider the ideal rewards you want. In this article, we will compare the two main types of reward schemes to make a better decision. You may choose between a card that will offer cash rewards for making purchases or a card that offers travel rewards like airline miles with your card.
Frequent flyer mile programs are now being offered as rewards with credit card purchases. This is just the beginning of a long race between different reward programs. It`s all about making the customer spend more, while making him or her believe that they are being rewarded lavishly for doing so.
These reward programs are definitely beneficial to the customer. However, the problem lies with redeeming the rewards. The problem with air miles is that you would have to accumulate a lot of miles to redeem them. There were also certain blackout dates, when you cannot use the air miles. You also cannot use the air miles beyond a certain date when it expires. Beyond these, neither can you access all air- lines with your air miles.
Credit cards with cash rewards are a good way of ensuring that you are not laden with stuff you do not need, or air tickets that you will not use. Obviously, the value of the cash reward will be lower than the value of the other sort of rewards that you can exchange for goods or services. However, you can use it for whatever you want. The customer is lured into getting a credit card which promises rewards, but you end up losing all the points when you don`t use it. It is also possible you can get stuff you do not really need from a catalog that is very limited in scope.
In today`s market, credit card companies have started giving back money as a way of luring customers. This is the best way of attracting new customers. You can get a card giving one percent to even five percent as cash back on any purchase that you make. Sometimes there are extreme reward credit cards that give out twenty percent as cash back on the purchase.
It is very convenient to get cash back. This is automatically credited to the attached savings account. You can also get gift cards, which can be used to purchase at selected outlets. The only issue with such cards is that you will have a specified time in order to get the cash. This might be around 120 days or so. With others, you will also have withdrawal limits. In this manner, you will lose whatever extra points you have accumulated over fifty dollars.