Credit Reward Programs

Credit card reward programs pay consumers for shopping with them.

Many credit card companies and some other lenders offer rewards programs to their customers. These can include airline miles, cash back and discounts on retail stores. It is important when choosing a card for the rewards it offers to also look at other factors such as annual fees, interest rates and and whether your reward points expire after a certain time.

Cash Back

Many credit card programs offer cash back. They will give you cash back on a percentage of what you purchased. Usually it's about 1 percent, but on some items can go up to 5 percent. So if you buy $5,000 worth of stuff, you might get $50 back. Some debit card programs also offer cash back. Cash back offers generally pay either as gift certificates, credits to your account or a check in the mail. The website Reward Programs lists many cash back reward cards.

Travel Rewards

Many credit cards offer travel rewards either as frequent flier miles, points toward hotel stays or rental cars, and other travel rewards. Some travel rewards cards only give points toward a particular airline, while others can be applied toward many. Also some rewards cards have blackout dates, or dates when you cannot use your rewards miles to travel. Capital One, for example, on its Venture Rewards card, offers two points toward travel for every dollar spent on the card which can be used toward virtually any travel expense. According to the Capital One website as of February 2011, if you have a flight that costs $100, just add two more zeros and that's how many reward points you need:10,000.

Retail Rewards

Many cards are tied to specific retailers. They might give double the percentage of cash back for shopping at particular retailers. They might also reward cardholders with points toward purchases at specific restaurants, home improvement stores, gas stations and other retailers. These cards can be issued from the retailers themselves or through major credit card companies who have contracted deals with specific retailers.

Other Loan Rewards

There are other rewards programs not tied to credit cards. UPromise, for example, is a free program through Sallie Mae, a publicly traded U.S. corporation dealing in student loans. With UPromise, purchases made through your account can bring cash back toward paying for college. The RH Reward program is offered through certain mortgage lenders for homeowners who pay their mortgages on time. An amount determined by the lender is added to the RH Reward account each time the mortgage is paid on time. When the mortgage is paid in full, the homeowner receives the award. If they make a late payment at any time during a 12-month period they risk losing the reward.

References

• Reward Programs: Airline Miles
• UPromise: How it Works
• RH Reward: How it Works

Resources

• Reward Programs: Cash Back