Rewards credit cards let you earn reward points when you spend on your card. Each card comes with different rewards you can earn and various structures, potentially bringing a lot of value to your wallet.
Rewards credit cards are tailored to certain types of spending. If you want to choose the right card for you, you'll need to consider the issuer's rewards program, your spending habits, and the card's overall structure. You may miss out on earning rewards if the card you choose does not fit your spending habits or lifestyle.
A wide variety of items can be redeemed using these reward points. Rewards with credit cards include dining vouchers, hotel stays, air miles, shopping, electronics, groceries, and much more. Most cards have an expiry date for the reward points, so be sure to redeem them before they expire.
These are the two most popular types of rewards credit cards:
- Cashback credit card
- Air miles credit card
Cashback credit card
Cash back is a straightforward way to get rewarded for using your credit card. As you spend more, you earn more cash rewards. Rewards cards have different interest rates, depending on whether you use them for shopping or for bills.
Air miles credit card
With miles-earning credit cards, you can redeem rewards for flights, airport lounge access, seat upgrades, and other travel-related expenses. You earn miles with these cards for every dollar you spend, and they often offer higher rewards rates when you make travel-related purchases.
Which is better, miles or credit cards?
Here are two of the most important questions you need to ask:
Do you travel often and can your spending earn you enough air miles to get free flights?
An air miles credit card is a great option if you travel frequently, especially on medium- and long-haul flights. A short-haul flight is worth less than a cent per mile while a medium-haul flight is worth one cent per mile. While business class seats are worth three cents per mile. Of course, your cumulative spend should allow you to convert your air miles points into flights. If it doesn’t, you are probably better off with a cashback card.
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