When people are looking for a credit card, there are a lot of factors that need to be considered. While many people are familiar with how important it is to consider interest rates, annual fees, and penalties, it is also a good idea to take a look at the rewards that the card offers. Credit card companies make money when their customers swipe their cards. Therefore, they will often offer rewards to incentivize the customer to use their card.

Of course, like the cards themselves, there are a number of important factors to consider when looking for credit card rewards. Not all rewards are created equally and it is important to find the rewards that best suit the spending style of the customer. With this goal in mind, there are several broad categories of rewards that should be analyzed in-depth.

Credit Card Reward Types

Credit Card Travel Rewards

Credit card travel rewards are among the most popular rewards that people use. Traveling can be expensive and between plane flights, hotel rooms, and restaurants, there are opportunities for credit card companies to partner with the travel industry to offer valuable rewards to their customers. When considering travel rewards, there are a number of important points to consider:

• Many travel cards will also offer some degree of rewards on everyday purchases in addition to bonus points for travel, sweetening the deal
• These travel cards will sometimes come with other rewards and perks such as discounts on dining, access to travel lounges at the airport, and even travel insurance
• Often, travel credit cards are dual-branded as both an airline card and a hotel card, leading to free nights at hotels in a shorter amount of time
• Sometimes, these rewards can be transferred to an airline account and used as frequent flyer miles, adding to their flexibility
• On the other hand, there are also a few points of caution for people to consider. These include:
  • Some of these travel cards have a prohibitive annual fee in excess of $500
  • While many travel cards offer a 0 percent foreign transaction fee, others may charge up to 3 percent
  • There might be blackout dates or other restrictions regarding when the rewards can be redeemed
  • If the rewards are redeemed for anything other than travel, this often delivers a big hit to the value of the rewards.

Make sure to consider all of these points when looking for a travel credit card. It is important to find a card that is right for your spending habits.

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Credit Card Cash Back Rewards

Cashback cards are another popular option for those looking for a credit card. These rewards are far more straightforward and are much easier to understand than other reward categories. Therefore, this category of rewards has become more popular. It is important to keep a few points in mind:

• First, these are cash rewards. Therefore, there are rarely any restrictions on how the cash can be used. This means that many people decide to apply these rewards directly to their statement, helping them pay their bills
• Many of these cash back cards do not have an annual fee at all
• Some of them will even offer a sign-up bonus that is delivered with the first purchase made with the card
• There are often added bonuses at certain stores and shops
• Occasionally, there might even be an APR offer.

On the other hand, there are also a few points of caution that people will want to consider. These include:

• Once the intro period is waived, the APR usually goes up significantly
• There are often foreign transaction fees that can make the card prohibitive to use overseas
• Many of the cashback cards do have a limit on the number of rewards they can deliver
• These cards are not great for those who are looking to reward their traveling.

Cashback cards are great for those who are looking for their first credit card with a decent rewards profile; however, it is also better to tailor the rewards to the spending habits.

Rotating Rewards

There is another smaller category of credit card rewards called the rotating category. Some people might be drawn to this category because of the prospect of higher percentages on certain items they might purchase on a regular basis. These cards can be viewed as offering a "promotion" on certain categories of items at various times throughout the year. The high percentage of cashback or points on certain common items such as food, gas, and travel is attractive to many people.

On the other hand, there are some times of the year when people might not purchase the "promotion" for that cycle with any frequency. As a result, they might feel like they are missing out on the bonus. They might even be pushed to buy that item unnecessarily. Furthermore, some cards require people to "opt-in" for the rewards that cycle. If people don't opt-in, then they don't have access to that promotion. Simply forgetting to do so can cost someone dearly. Keep this in mind when considering a rotating rewards card.

Credit Card Points-Based Rewards

Another common rewards category that people have likely heard about involves credit card points. The cards advertise their points in all sorts of ways and the pure number of points can make them seem attractive. On the other hand, it is always a good idea to dive a little bit deeper and investigate the true value of these points a little more closely:

• Often, the cards that come with points offer a fantastic sign-up bonus that might already be redeemable for a week in a hotel or two free plane tickets
• The points can often be redeemed in multiple ways across multiple categories
• There are often opportunities to earn additional bonus points that might come from things such as referrals
• Credit card points are sometimes transferable to travel accounts where they can be redeemed as miles
• Some credit card points allow people to merge the balance with another credit card's point balance.

When it comes to credit card points-based rewards, there are also a few areas of caution that people should know. These include:

• Sometimes, these cards have an annual fee that is extremely high
• Credit card points sometimes expire, rendering them useless
• One credit card point is not the same as one dollar, making it hard for people to sometimes understand what their points balance truly means
• There are often restrictions on the sign-up bonuses and how the points can be used
• All of these points are important to consider when looking for a points-based credit card rewards system.
  
  

Don't Let Rewards Change Your Spending Habits

Finally, those who are looking for a rewards credit card need to remember that the rewards should not change that person's spending habits. If this happens, people will simply end up spending more money than they should, chasing down credit card rewards. It is always better to tailor the rewards themselves to the spending habits, finding ways to earn discounts and extra money on items that are already purchased. To find the right credit card, take a look at where the money is going. Then, find a credit card that offers supreme rewards in this area.