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Research: Selecting credit cards based upon their rewards -

Credit-card rewards are one of the many marketing strategies adopted by credit-card companies to lure customers. They do this by linking their customers' credit-card purchases to certain attractions or benefits. These reward programs are therefore extremely desirable even from the customers' point of view, provided a little vigilance and prudence is used while choosing them.

In this age where most financial gurus discourage the use of credit-cards, credit-card reward programs have emerged as one of the finest examples of smart marketing, having the potential to create a win-win situation for both the credit card company and its customers.

Today, credit-card users have a wide array of alternative rewards to select from. But before they decide which one to sign up for, it is imperative that they evaluate different credit-cards on the basis of the rewards, rebates and other benefits associated with their usage. That is to say not all credit-card reward programs are the same. Hence, a potential credit-card user must compare and contrast the charges, procedures as well as accumulation and redemption of points before taking the plunge.

It is also essential that one finds beforehand as to whether the credit-card of his choice automatically enrolls him to the benefits of its reward programs or it necessitates adherence to certain laid down procedures or payments to become eligible for the advantages thereof. But once they are enrolled, they have a wide assortment of credit-card reward programs to choose from.

The 'cash back / rebate cards' are the most sought after reward programs for the simple reason that these enable users to get a part of the payment made by them using their credit-card back, either in cash / check or by the way of a discount of the said amount, thus increasing their practicality. However, selecting a credit-card that offers the best cash back may not be that easy. It requires one to evaluate each card closely to find out the hidden costs such as annual fees, balance transfer fees and grace period apart from the list of stores where it can be used.

The 'frequent-flier reward cards' are ideal for those who frequently travel by air. Such a card enables its user to collect air miles for the distance traveled and subsequently redeem these air miles by getting free air tickets. There are a few cards that offer hotel rewards entitling its users free stay in hotels either in conjunction to their frequent-flier card or separately.

The 'points reward cards' help you earn points upon each of your purchases. You are required to collect these points and redeem them later by choosing merchandises from their list, for free.

Lastly, the 'gasoline reward cards' entitle you to free gas once you have accumulated a certain number of points.

All said and done, one must not forget that non-payment of the amount due for your credit card purchases comes with penalties, and exorbitant interest rates. So, while deciding which credit card to choose, select the one which delivers the best mix of a reward program most suitable to your lifestyle and having the lowest penalties / interest rate. Its also important, to read the terms and conditions before signing-up for one. For all you know the reward program might be nothing more than marketing gimmick!