Credit Card Points:
The most common type of point programs
are airline mile credit
cards. But many other reward credit cards use this
system as well. These programs reward you for making new
purchases and allow you to earn a specific number of points
(or "miles") for every dollar you spend. These
points then accumulate until you reach a pre-determined
amount where you can redeem your points. Normally, a wide
selection of rewards and incentives are available.
Pro's and Con's:
PROS:
- Points can be redeemed
anytime (once accumulated).
- Rewards are targeted
towards your specific personal interests.
- Receive extra bonuses
and discounts at specific locations.
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CONS:
- Points can only be redeemed
for products or services.
- You must accumulate
a specific number of points to claim a reward.
- Points may only be redeemable
at specific locations.
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Percentage Programs:
Cash
back credit cards are the most common type of percentage-based
reward program. But many other reward cards, such as gasoline
credit cards, operate the same way. The amount of
cash back (or rebates) you earn is based on a percentage
of how much you charge. Sometimes, this value is a flat
rate. Other times, your rate of return is determined by
a tier-based system.
Pro's and Con's:
PROS:
- Less limitations and
easier to use than points.
- Receive CASH instead
of pre-determine products or services.
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CONS:
- Normally, rewards are
only paid out once per year.
- May not receive higher
incentives on specified products or services.
- If tier-based, it may
be difficult to follow or understand.
- Less targeted towards
your personal interests.
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* Read our article about Cash
Back Credit Cards to find out how much money you can
earn using a cash back credit card!
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