Understanding Your Credit Card Rewards

Thursday, October 10th, 2013
Updated: October 10th, 2013
The content is accurate at the time of publication and is subject to change.

A recent survey from JD Power and Associates showed that 41% of people don’t completely understand their credit card’s reward system. If you are one of them, keep reading.

If your credit card offers rewards and you aren’t using them, you could be missing out on cash back, frequent flyer miles, free nights at a hotel, and much more. Some people may think that the rewards offered by their credit card company are just a way to get them to spend money—nothing more than an advertising gimmick. But if you think that, think again. Sure, you have to spend money to get credit card rewards, but you are going to spend money anyway. If you have to spend money, you may as well get something for it. Credit card rewards are truly a way to make your money work for you.

Points, miles, percentages and bonuses

All credit cards have their own way of structuring their reward programs. Some use points, some give miles, and some award bonuses or give a percentage of cash back. Here are the basics of each type of reward:

  • Points: Credit cards that give points usually award one point per dollar spent as a base reward. For certain categories, they may give double points—two points per dollar spent—or even triple points. These points can then be redeemed for cash back, gift cards, merchandise or frequent flyer miles.
  • Miles: If your credit card gives miles, they could be a couple different kinds. One type of “miles” is really a credit that can be applied toward the purchase of airline tickets on any carrier. Another type is miles that are specific to one airline. These may be transferable to another airline that has a partnership agreement with the airline, called an alliance.
  • Bonuses: A sign-on bonus, an anniversary bonus, a referral bonus—there are several different bonuses that credit card issuers give customers. A sign-on bonus is usually the most valuable, with offers like 30,000 frequent flyer miles for spending $1,000 in the first three months, or $100 in gift cards after you make your first purchase with the card. Anniversary bonuses are usually a percentage of the total rewards you earned that year. Referral bonuses can be things like a free companion fare on your next flight, or a gift card.
  • Percentage of cash back: Cash back credit cards give you a straightforward reward—usually one penny for every dollar spent. That’s 1% cash back on all purchases. Many cards give extra in certain categories, up to 5% cash back, but this often has a cap that limits the amount of your rewards.

No matter what kind of rewards your credit card offers, you don’t want to leave them on the table. Go to your credit card issuer’s web site or call the customer service number and talk to a representative to make sure you get the most from your rewards program.

All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.

Latest Credit Card Rewards Guides

Common mistakes to avoid when using rewards credit cards May 13th, 2024

Rewards credit cards are a special category of credit cards that offer users various incentives, benefits, or discounts for using the card. Cashback, points, and miles are the three most common types of rewards. When used correctly, rewards credit cards can be a powerful tool to help you maximize your earnings, but only if you […]

Continue »
Guide to Actual Time-Limited Credit Card Promo Offers August 26th, 2020

From time-to time, credit card issuers may roll out some special promotions valid for a specified period. Such deals may be available to already existing cardholders or, on the contrary, to new applicants only. With these perks, you may often reap many benefits and credit card rewards and be completely confident that you are now […]

Continue »
Credit Card Rewards Review – What Type to Choose March 6th, 2020

When one imagines the perfect credit card, it, as a rule, comes with a worthwhile rewards program. Rewards are one of the main advantages of credit card owning. And no wonder, since we all are so used to the pleasure of receiving bonuses and discounts during shopping. Therefore, everyone wants to have a rewards credit […]

Continue »
Rotating Rewards: The Key To More Cash Back February 2nd, 2020

When looking for a new credit card, most people want one that will give them the most rewards. But with so many different types of rewards credit cards to choose from, how can folks know which one is going to deliver the most bang for their buck?

Continue »
Three Rules For Getting The Best Credit Card Reward Offers January 24th, 2020

People often wonder what kind of credit card will give them the most valuable credit card rewards. Should they get a travel rewards card, or a co-branded airline card, or a cash back card with rotating reward categories?

Continue »
Best Credit Offer
First Tech Platinum Rewards Mastercard®
Check off the cards you want to compare. Then click the Compare link to go to the comparison table.
Consumer Rating: 5 / 5
Horizon Card Services Group One Freedom Card
Copyright © 2001-2024 BestCreditOffers.com All Rights Reserved.

See the credit card's terms and conditions on the online application page. Note that this website may be compensated by credit card issuers when the visitor applies for a card through the links on this website. We do our best to maintain all information accurate and up to date. However, we do not warrant the credit card information won't change. Click the "Apply Online" button and review the current info on the secure credit card terms page.

Information in these articles is brought to you by BestCreditOffers.com. Banks, issuers, and credit card companies mentioned in the articles do not endorse or guarantee, and are not responsible for, the contents of the articles.

The BestCreditOffers.com webpage is a free service and an information resource for credit cards and financial products and services available to eligible United States consumers. BestCreditOffers.com does not offer any warranties and is not a direct service. There are no guarantees for approval or offers when applying for a credit card. Please refer to the application if you would like more information on each credit card. When you click "Apply" for a particular credit card, please take the time to review the terms and conditions of the product/service at the issuer's website. All logos on the BestCreditOffers.com website are property of their respective owners.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer. Opinions expressed here are the author's alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. Reasonable efforts are made to present accurate info, however all info is presented without warranty. Consult a card's issuing bank for terms & conditions.

BestCreditOffers.com makes every effort to keep information up to date and accurate. However, the information regularly changes and is presented without warranty. Therefore, we strongly recommend all our readers to visit the credit card application page by clicking "Apply Online!" button to review the detailed credit card's terms and conditions. Note that BestCreditOffers.com may be compensated by the credit card issuers when the readers apply for a credit card through this site.

BestCreditOffers.com is an independent, advertising-supported website which receives compensation from the credit card issuers and companies whose offers appear on the site. Compensation may impact how and where products appear on our site, including, for example, the order in which they may appear on the site pages. BestCreditOffers.com does not review or list all available financial or credit offers.

You've successfully subscribed!

Please specify the following:All these fields are optional

Thank you for providing this information! We will make sure our letters are useful for You.

User Generated Content Disclaimer: These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.