Rewards credit cards have become increasingly popular in recent years as more and more people are looking for ways to earn rewards on their everyday spending. These cards offer a variety of benefits, ranging from cash back to points or miles that can be redeemed for travel, gift cards, merchandise, and more. By using a rewards credit card for your purchases, you can earn rewards that can help you get closer to your next vacation or big purchase.
What is a rewards credit card?
A rewards credit card is a type of credit card that rewards you with cash back, points, or miles when you make purchases with your card. The rewards you earn are based on the amount of money you spend on your card, and can be redeemed for a variety of rewards, depending on the specific card you have. Most rewards credit cards fall into two main categories: travel credit cards or cash-back credit cards.
Cash back credit cards offer a straightforward way to earn rewards, as you earn a percentage of your purchases back in cash. This cash back can be used for anything you’d like, making it a flexible option for rewards. Travel credit cards, on the other hand, allow you to earn points or miles that can be redeemed for travel-related expenses, such as flights, hotels, rental cars, and more. Some cards also offer additional perks, such as travel insurance, airport lounge access, and more.
How to choose a rewards credit card
Before choosing a rewards credit card, it’s important to analyze your spending habits to determine what type of rewards card is best for you. Do you prefer to earn cash back or travel rewards? If you spend a lot on travel, a travel credit card may be the best option for you. If you prefer cash back and want more flexibility in how you can use your rewards, a cash-back credit card may be a better choice.
It’s also important to consider the annual fee of the card, as many rewards credit cards charge an annual fee. While cards with higher annual fees typically offer more perks and benefits, it’s important to weigh the potential rewards and benefits against the annual fee to ensure that it’s worth it for you.
What credit score do I need for a rewards card?
Most rewards credit cards require you to have a good credit score of at least 670 to be approved. However, some premium rewards credit cards may require an excellent credit score to be approved. It’s important to check the specific requirements of the card you’re interested in before applying.
If your credit card application is declined, you can call the card issuer’s reconsideration line to ask them to reevaluate your application. Additionally, some cards have application restrictions that may prevent you from being approved, so it’s important to be aware of these restrictions before applying.
How to maximize credit card rewards
One way to maximize credit card rewards is by using multiple rewards cards to take advantage of bonus earnings in multiple spending categories. For example, you could combine a dining credit card with a grocery credit card to earn extra rewards on your purchases.
It’s also important to use your rewards credit card for all of your purchases, not just for certain categories. By using your card for all of your spending, you can maximize the rewards you earn and get closer to your next vacation or big purchase.
In conclusion, rewards credit cards offer a variety of benefits for consumers looking to earn rewards on their everyday spending. By choosing the right rewards credit card for your lifestyle and spending habits, you can earn rewards that can help you reach your financial goals. Remember to consider the annual fee of the card, as well as any application restrictions that may apply, before applying for a rewards credit card. With the right strategy, you can maximize your credit card rewards and enjoy the benefits of your rewards card.