Learn more about your credit card reward options and how they work.

You have many options when it comes to credit cards, and many cards offer rewards. There are cards that offer you cash back, travel miles, or points that can be redeemed for items when you make qualified purchases.

You should consider how you spend and what you spend money on when shopping for a credit card. For example, if you travel frequently or want to save up for a trip, a travel rewards card may be the best option for you from a rewards perspective. However, you should also confirm what purchases qualify for rewards and which purchases earn the most points to ensure you will be able to earn points for the things you buy. Here’s more information on types of credit card rewards and how they work.

Types of Credit Card Rewards

Travel Credit Card Rewards

Travel miles are one way credit card companies can reward you for spending with them. You can earn travel miles by using an airline branded credit card or travel rewards card. With these types of credit cards, you will typically earn miles on all purchases you make with the credit card, but certain purchases will earn you more miles than others. For example, purchases on travel will typically earn you more miles than purchases at a retail store. If you choose an airline branded credit card that’s associated with an airline you use often and have a frequent flyer account with, you can earn additional perks like higher membership status with the more you spend.

Cash Back Credit Card Rewards

Cashback rewards cards give members the ability to earn a percentage of each purchase in cash back during each billing cycle. Over time, you can build a reward balance that can be used to pay off some of your credit card balance. These credit cards typically have spending categories that you sometimes need to opt into. These categories typically cover common purchases like groceries and gas. You can generally redeem cash back rewards for online purchase credits, gift cards, or statement credit, which can help you pay down debt faster.

Points Credit Card Rewards

Points are typically the most versatile reward type. You aren’t limited to only one kind of reward. You can generally choose from a variety of gift cards that can be used to cover flights, hotel stays, and retail purchases. You may also have the option to redeem points for actual items like earbuds, jewelry, golf clubs, and more. Some points credit cards may also allow you to convert your points into a statement credit to pay down your balance. You can generally earn points by making purchases on dining out, groceries, gas, and more.

Ways to Earn More Credit Card Rewards

In addition to spending on qualifying purchases, there are other ways to boost your credit card rewards. Many credit card companies offer sign-up bonuses. Look for offers before signing up for a credit card. You can earn thousands of points by taking advantage of a sign-up offer. These companies will typically require you to hit a certain spending threshold before you can earn the bonus. For example, you might have to make $3,000 in purchases within three months of signing up for the credit card to earn a bonus.

Some credit card companies will offer a referral reward for customers who refer a friend or family member to open a credit card. You will receive a unique referral link from the credit card company, which your friend or family member will need to use to apply for the card. If they are approved, you will receive bonus rewards.

Is a Rewards Credit Card Right for Me?

A rewards credit card can be a good option if you are looking to improve your credit score, build a positive credit history, earn rewards while you spend, and pay for expenses you can pay off by the end of the month. You can choose between travel rewards, cash back rewards, and points credit cards. While credit card rewards can be beneficial, they aren’t worth much if you accumulate too much high interest debt. It can also be really difficult to earn rewards. You can spend thousands of dollars to earn a few hundred dollars’ worth of rewards.

Be mindful of what you purchase with a rewards credit card. Make sure the annual fee is worth the rewards and benefits you earn. Spend wisely, and make sure you pay off your balance each month to avoid paying too much in interest.

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