There
are different ways of earning rewards from credit cards nowadays. The different
kinds of rewards offered by credit card companies are cash back,
discount/entertainment coupons and flyer miles.
As more and more people turn to using credit cards as the
standard mode of payment as opposed to the traditional cash or cheque options,
credit card companies are stepping over each other to capture a significant
share of this part of the money market. While earlier , one had to pay hefty fees for owning a credit card, an
yearly one for using it , and then of course the high interest that had to be
paid up in case of late payments, today, many of these have been scrapped as
credit card companies bend over backwards to acquire and retain their
customers. One of the main features highlighting these changes is the emergence
of Reward Credit Cards in the market.
Reward Schemes: The consumer can accumulate points based on
credit card usage. The more the usage, the more the points which can be
accumulated and then used for earning rewards from the credit card. Most
companies offer rewards in the form of redeemable gift or discount coupons of
certain stores, entertainment coupons for meals or shows or free or discounted
gasoline at select stations. Earning rewards from credit cards is the most
popular rewards scheme.
Flyer Miles Schemes: Getting flyer miles is another method
of earning rewards from credit cards. These schemes let the user accumulate
flyer miles which become redeemable for air tickets once a certain amount of
points /flyer miles are accumulated. Flyer miles are rewarded based on amount
spent through the credit card over a certain period of time. This is the best
credit card reward for business men who need to travel frequently, since it is
only large spenders who can accumulate enough points to get any significant
flyer miles.
While earning rewards from credit cards seems very tempting
at first, some points do need to be kept in mind for getting the best out of
credit card rewards. First of all, make sure that the card does not carry an
annual fee. Secondly, earning rewards from credit cards are profitable only for
people who do not let any interest charges accumulate on their cards by paying
off their monthly balances on time as interest rates on these cards are higher
than average.