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Research: Rewards for Spending - As Good as it gets -

Everyone loves to shop. Even if we don`t, shopping is inevitable and with shopping comes the thought of all the money that we spend. How would it be if we get money for every penny we spend? That exactly is the concept of a credit card rewards system.

Credit card rewards are offers or incentives provided by credit card companies for their loyal customers to encourage the use of credit card instead of cash. These incentives are also used to build a customer base and to attract new ones into buying the card. They are attractive offers in the form of cash back or discounts on merchandise and so on. Every time you use your credit card and spend some money, you accumulate your reward. Every credit card company has a different reward plan. There are three different forms of credit card rewards:

Rewards by points:

This reward system assigns a certain number of points for every amount you spend. The more money you spend the more points you get on your card. Usually, for every dollar you spend you earn a point. After you accumulate a specified number of points, you can redeem them in the form of cash back, travel, gift cards or merchandise.

Cash back rewards:

The credit card companies that offer this reward will pay a certain percentage of every dollar you spend. For example, for every $1 you spend you will be getting back 4% of $1. Usually, with every high point you cross, the percentage of money you get increases. That means, if the high point is set to $25 and you have made a purchase of $25: instead of getting a 4% cash back, you are eligible for a 5% cash back. With every $25 you spend, your cash back percentage may be increased by 1%. Usually you get your cash back with every billing cycle or it may be accumulated until a certain limit set by the credit card company.

Airline miles and accommodation:

Some credit card companies offer reward systems in the form of airline miles. That is, for every dollar you spend, you get so many airline miles accumulated. You can redeem these for only travel with the airlines that accept these reward systems. Usually to redeem them, you will have to cross a limit of miles set by your credit card company. These reward systems usually help only frequent flyers. Rewards are also offered in the form of free stay at a hotel when you travel. Usually, the card that offers airline miles reward program offers this plan too. You can redeem the points you accumulate or get cash back for your accommodation needs in hotels that accept your credit card reward programs.

With so many attractive reward schemes and lots of credit cards to choose from, it is difficult to make the best choice. Choose the one that is most beneficial to you and that gives maximum rewards for your spending pattern. Some of these credit cards may have a time limit within which you will have to use your reward scheme. Be aware of any such implicit conditions and choose your credit card wisely, to make the most of your reward scheme.