So, you want a new credit card and figure getting a reward card is the way to go. But you’re a bit confused about the difference between reward credit cards and cash back credit cards. It’s not surprising because even many credit card companies use the terms interchangeably. But they are different.
Make the right choice and you’ll find yourself with “free” gifts or cash. Make the wrong choice and you might not see any “free” rewards at all.
Invest just a little bit of time online comparing offers and when it comes time to redeem your rewards you’ll get what you want.
Here are some of the more important things to consider:
Would You Prefer Money, Products or Services?
Whereas a cash back credit card will send you cash periodically, a reward credit card issues points or miles for your purchases. You can then convert the reward points into discounts on travel and/or various services and products. The rewards vary from one card to the next.
How Do You Get the Most Value?
On the surface nothing beats a financial rebate. However, reward cards that give you points or miles often offer incentives that are usually worth quite a bit more than what you’d get for the equivalent use of your cash back credit card.
Thoroughly scrutinize what you can trade your points for because if you find things you like you will get much better value from reward card cards than from cash back credit cards.
The Big Problem with Reward Credit Cards
Reward credit cards can be a time-sucking hassle because you need to keep track of your points in order to get your rewards whereas cash back credit card companies either send you your money automatically or apply it directly to your balance due.
So, if you don’t want to bother tracking your miles and/or points a cash back credit card would be a better choice.
Cash Back Credit Cards Or Reward Credit Cards – Which One is Best For You?
13-12-2009 by adminHotel Rewards Credit Cards Are Very Rewarding For Travelers
29-07-2009 by admin
Hotel rewards credit cards give you the chance to stay at a luxurious hotel for free and are a great option for those who travel a lot. All you have to do is use the card to pay for items and services at the places you usually shop and eat, collect the points from these purchases, and redeem the points at participating hotels.
Choosing a Hotel Rewards Credit Card
The process of using a hotel rewards credit card really is as simple as previously described, but choosing one that works best for you isn’t as straightforward. There are dozens of these types of credit cards available, each claiming to be better than the other. But we all know that what’s “better” for one person may not be for another.
The pros and cons of some of these cards will be covered later in this article. But before you even get to that part, you need to know that if you’re one to keep a balance on your credit card, then a hotel rewards credit card may not be the best option for you. Some studies show that 60% of people keep a balance on their credit cards. If you’re part of this majority, your rewards points will end up costing you money instead of giving you something for free.
Maximize Your Hotel Rewards Points
To collect as many hotel rewards points as possible, you should use your hotel rewards credit card for your normal spending every time you can. Some people are hesitant to use a credit card for daily expenses because they’re afraid that they’ll go into unnecessary debt just to buy a carton of milk and some eggs. But this won’t happen if the amount you put to the credit card is paid immediately.
Comparing Hotel Rewards Cards
Ideally you should keep the balance on your hotel rewards credit card at zero. But there are a few cards that make it worth your time and effort to transfer a balance from an already existing credit card.
The Chase Flexible Rewards Platinum Visa Card, for example, offers a six-month zero-interest introductory period. After the introductory period, the interest rate goes up to 11.74%. The card provides one point for every dollar spent, which means that this is what you will earn on any transferred balances unless there are restrictions.
If you pay off your transferred balance within six months you’ll have a substantial amount of hotel reward points and your credit card debt paid off at an interest-free rate.
While some hotel rewards credit cards offer a reduced introductory interest rate, most have a slightly higher regular interest rate than a non-reward card.
Both the Hilton HHonors Platinum Credit Card from American Express and the Starwood Preferred Credit Card from American Express have fairly high interest rates at 17.74% each. The cards offer six-month introductory interest rates of 2.90%. The Starwood Preferred Guest card also charges a $30 annual fee that’s waived the first year.
While the interest rates on these cards are higher, the bonus points you’ll receive might make them a good option. The Hilton HHonors card provides 10,000 Honors bonus points after your first purchase on the card. This is equal to one free night.
If you pay off your balance immediately, you’ll get one free night at the Hilton with this card without losing money to interest payments. Plus you get between three and five hotel reward points for every dollar you spend, instead of the typical one point per dollar.
The Starwood Preferred Guest Credit Card may have an annual fee, but it’ll give you 10,000 Starpoints after your first purchase, which is enough for up to three free nights.
Starpoints can be used at over 825 participating Starwood hotels and resorts in 95 countries making this hotel rewards credit card one of the most versatile. Some others may have restrictions.
How to Pick Your Hotel Rewards Card
Don’t rush. Decide exactly what you would like in your hotel rewards card. Do your background research, and then pick a card with the features that will benefit you the most.