Earning Rewards with Your Credit Cards

In today's competitive credit card market, issuers of credit cards have become quite creative in the features and benefits offered with their cards. From zero percent introductory interest rate cards to credit cards with rewards, almost every card now comes with perks attached.

There are many varieties of reward programs, but three types of credit cards with rewards are very popular: those that let you earn miles, those that let you earn points, and those that let you earn cash back. Each type has benefits that are worthy of consideration.

One of the first credit cards with rewards allowed users to earn miles that are credited to a frequent flyer program associated with an airline. In general, cardholders earn one mile for every dollar that they charge to the credit card; the frequent flyer points are accumulated throughout a month's time and transferred to the frequent flyer account each month. These rewards cards are an excellent choice for someone who likes to earn travel awards but may not do enough actual flying to earn rewards without the added bonus of miles from their credit card usage.

Other popular credit cards with rewards allow the cardholder to earn one point for each dollar charged to their card. Points can then be exchanged at various levels for rewards that the card issuer chooses; common reward categories include merchandise, gift cards, travel, and even a credit applied to their card account balance. A points reward card works out well for a cardholder who likes to earn a variety of rewards from their credit card use.

A third type of credit cards with rewards is known as a cash-back card; with this card, the cardholder earns 1% of the amount they charge to their card in the form of cash. The 1% accumulates until it reaches a threshold, such as $50, at which point the card issuer sends a check to the cardholder. Cash back cards are often not quite as generous as other rewards cards, but everyone likes saving money by receiving extra cash.

Earning rewards for purchases made with a credit card can be a wonderful benefit, but it is important not to get caught up in the card rewards without also considering basic card features such as interest rate, annual fee, and credit limit. Whichever type of rewards card you consider, be sure to read all of the fine print contained in the application before you apply for credit card.