Types of Credit Card Rewards and How They Work
One of the simplest ways of capitalizing on all your credit card benefits is by knowing the ins and outs of your credit card rewards. Typically earned every time you make a purchase through your credit card, these rewards help you save money on a lot of your routine purchases. These include dining, merchant store shopping, travel, etc., to name a few. Now, the kind of rewards you can claim usually depends on the type of card you opt for. So, choosing the right card is crucial. Need help? Here’s a list of the three types of credit card reward schemes available out there.
Depending on the type of credit card you choose, you can get cash back on a range of products from groceries to food delivery. For instance, a cashback card for online bill payments awards cashback every time you make an online bill payment.
When you use a cashback card, you get a certain percentage of cash as a reward for spending on various items. Some cards allow you to collect points instead of directly providing a cashback on every transaction. These points can be collected over time and redeemed as cash later on.
2. Credit card reward points
These cards earn you reward points every time you use them to make a purchase. However, the value of the reward point varies depending on the card company you choose. This is why you before getting a card, it’s good practice to confirm the value of the reward points with the issuer.
You can redeem credit card points to buy several products for free or get cash vouchers for restaurants, entertainment venues, and other things. Remember, credit card reward points come with an expiry date, so make sure you redeem them before they expire.
3. Credit card miles
When you apply for a miles rewards program on your credit card, you earn miles depending on your credit card spending. The maximum number of miles you can accumulate on your card typically depends on the value set by your card company and the partner airlines. On accumulating sufficient miles, you usually get a free airline ticket.
Take note that the number of miles required for a ticket depends on a few factors. This includes your travel destination, whether you’re traveling during the peak season, and also the cost of the ticket without miles.
Credit card rewards in the form of cashback, reward points, and miles offer you benefits depending on your spending habits and also according to the terms of your card company. Institutions like the IndusInd Bank even offer personalized credit cards with higher limits, making card transactions even more convenient. So, what are you waiting for? Get a credit card and apply for a suitable rewards program today!