Understanding Your Credit Card Rewards

Thursday, October 10th, 2013

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.

Latest Credit Card Rewards Guides

The One Thing You Need To Know About Rotating Rewards Credit Cards July 18th, 2017

If you have a cash back credit card, chances are it’s one that offers you 5% back in certain spending categories that change each quarter. These types of cards are some of the most popular cash back cards, and for good reason. It’s an easy way to earn cash back in different ...
Continue »

Unexpected Ways to Earn Credit Card Rewards May 17th, 2017

Double and triple points can boost your rewards balance, while rotating categories of 5% back often let cardmembers earn up to $75 cash back per quarter.
Continue »

How a Travel Rewards Card is Different From Other Rewards Cards December 28th, 2016

Did you know that a credit card could do much more for you than simply pay for purchases? A credit card is a tool, not just a payment method, and if you choose the right tool, you’ll be able to do more than you ever thought possible.
Continue »

5 Unexpected Perks of Rewards Credit Cards June 15th, 2016

Rewards credit cards are great for earning airline miles, cash back, and points to use in a variety of ways. But there are some benefits to cash back cards that you might not know about. Here are five unexpected perks that your rewards credit card might offer you
Continue »

How to Boost Your Credit Card Rewards Balance February 17th, 2015

If you’re an active user of credit card rewards, you may think you already know how they work. You spend money on your card and collect the points, dollars, or cash back that accrue from each purchase. Then, after saving up until you have enough to redeem, you choose how to ...
Continue »

Best Credit Offer
Discover it® - Cashback Match™
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 Horizon Gold Credit Card
Copyright © 2001-2017 BestCreditOffers.com All Rights Reserved.

* 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.

Disclosure: Not an access card.

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.