Rewards based credit cards : Credit Card Guide

Rewards based credit cards

With a choice of rewards credit cards available on the UK market today, consumers can look forward to finding a competitive deal on their credit card along with rewards that they can enjoy accruing and using.

There are rewards based cards available to suit most needs, and these credit cards can prove very effective for those that want to get a little back from their credit card company.

One of the most popular types of rewards credit card is the cash back card. This is where the cardholder simply has to use the credit card in the usual way, and by doing this can accrue cash back, which is applied to the card by the credit card company.

The level of cash back that you receive can vary from one credit card issuer to another, and is generally a percentage of each pounds spent. Most cards offer around 0.5% or 1% cash back on each pound spent on the card. However, more recently some credit card providers have started to offer higher cash back levels on certain purchases or for set periods, with some reaching 5% cash back.

Other types of rewards based credit cards include retail rewards, air miles, discounts, travel based rewards, and even charity based cards, which means that consumers can find rewards that will suit their needs and lifestyles. With a rewards based credit card it is possible to actually enjoy the ease and convenience of spending on a credit card along with the chance to earn rewards for your spending, and when used in the right way these credit cards can prove very effective.

A number of credit card companies offer rewards credit cards, and therefore you can select from a choice of cards from a variety of lenders. It is important to compare different rewards based credit cards in order to find the right one for you in terms of the rewards offered and the level of reward offered – as with cash back credit cards the level of other rewards awarded can also vary from one credit card provider to another. You can compare these credit cards with ease and convenience using the Internet, which makes if faster and simpler to find the rewards based credit card that best suits your needs.

One important thing to remember is that a rewards based credit card is best suited to those that repay their balance in full at the end of each month. This is because you can then use your credit card for every day purchases as well as one off purchases, thus enjoying the convenience of being able to use a credit card and earning maximum rewards on your spending. By repaying the balance in full each month you can enjoy avoiding interest charges on your card balance, which means that you get to earn rewards from the credit card company without having to pay any interest to the card company. If, on the other hand, you spread your repayments, you could find that any rewards earned are counteracted by the interest that you have to pay.

You should also bear in mind that you can only earn rewards on purchases made and not for cash transactions. In fact, if you use the card to make cash transactions and withdrawals you could be hit with hefty fees as well as missing out on the chance to earn rewards, so wherever possible cash transactions on these cards should be avoided.

Tom Smith
21st October 2007

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