Rewards Credit Cards vs. Regular Credit Cards Comparison
Regular credit cards are issued to allow people to buy things on borrowed money and pay a portion of what you borrowed plus interest every month (if you carry a balance). Rewards credit cards are credit cards that also allow consumers to earn rewards based on use of the card. Rewards credit cards typically offer 1 point for every $1 in card purchases (subject to specified caps) which can be redeemed for cash, products or services.
Common “rewards” offered by credit card companies include:
- Airline Miles
- Hotel Accommodations
- Car Rentals
- Cash Back
- Savings on Gas Purchases
- Mortgage Rewards
Before you apply for a rewards credit card…
- Assess which reward card is likely to present the best value to you.
- For frequent travelers, airline miles and hotel stays might be a valuable reward.
- If you’re not a frequent air traveler, but you drive your car, savings on gas might be more important than airline miles.
- Compare the rewards credit cards. Some common comparison features include:
- Annual Fee
- Annual Percentage Rate (APR)
- Introductory APR and Intro APR Period
- Grace Period
- Late Fees
- Overlimit Fee
- Number of Points per Dollar Spent
- Percentage Cash Back
- Minimum Number of Points Needed to Redeem for Rewards
