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Ankur Mittal
by on August 5, 2022
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Thinking of taking a credit card but every time when you research about them you keep getting confused? Whether to take a credit card or not? Is it worth it to take a rewards credit card? Do all these questions keep popping up in your head? Then you have reached the right article, hereunder we have discussed everything about the rewards credit card.

What are rewards credit cards?

Rewards credit cards as the name suggest a credit card that rewards with some incentives on using it. There are majorly 3 rewards categories namely Reward points, Cashback, and Travel points. The rewards program differs from credit cards to credit cards. For a basic understanding of how these rewards work, keep reading below:

Reward Points Credit Cards: The incentives of these credit cards revolve around the reward points. You earn reward points every time you use this credit card for making payments. However, you must know which transactions let you earn reward points before you use your credit card as this will allow you to maximize the benefits. Once you have accumulated enough reward points you can redeem them against purchasing products, booking flights/hotels, gift vouchers, etc.

Cashback Credit Cards: These credit cards let you earn cashback on your spending. A percentage of your spending is reverted to your account. The cashback that you earn on these credit cards does not expire and you do not have to worry about redeeming them. The incentives on these credit cards are limited as compared to the reward points credit cards.

Travel Credit Cards: These credit cards come in two categories, generic travel credit cards, and co-branded credit cards. On co-branded credit cards, you earn travel miles only on the partner Airlines and the points are redeemable there only. While on a generic travel credit card you earn travel points on selected categories and are redeemable for products and services mentioned in the product catalog.

Are rewards credit cards worth it?

Definitely, they are. Who would not like to earn incentives when they spend? Moreover, you can redeem the earned rewards for various categories. They will only be of advantage to you when you know how to use a credit card wisely. Using a credit card responsibly is the key to maximizing its benefits. You must clear the credit card dues in full every month and maintain a low credit utilization ratio. Rewards come with an expiry date so you must redeem them timely in order to maximize the benefits of your credit card . If you are someone who forgets the due date, then you can register for the auto-debit services so that your credit card dues gets clear on time and you do not have to face any unfavorable situation.

Bottom Line:

To conclude, we hope that your mind is clear now as to the rewards credit cards and how are they beneficial to you. The main aspects of these credit cards are the timely credit card bill payments and a low credit utilization ratio that can help you derive the most out of the credit cards.

If you have any queries do share in the comment box we would love to address them.

Additional Reading: Types Of Credit Card Rewards
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James
Rewards credit cards can be worth it, but it depends on your financial habits and goals. Earn points, miles, or cash back on everyday purchases, essentially giving you money back for spending you already do. Building Credit: Using your card responsibly and paying your balance in full each month help... View More
Like April 3, 2024