How Do Reward Points On Your Credit Cards Really Work?

You’ve likely seen a lot of commercials and gotten pitches in the mail for a number of credit cards that offer reward points. You may have found yourself wondering if they really work. After all, if reward points credit cards were such a good deal, would they really have to advertise them so much?

The answers are yes, reward points credit cards do work and yes, they still have to advertise them, even though they are a good deal.

The way credit cards with rewards points work is that you will get a certain number of points for every dollar you spend on that card. Most credit cards offer one point per dollar for general purchases. Some will offer bonus points for purchases from certain retailers, airlines, or other companies they are working with on a promotion.

Once you have collected a substantial amount of reward points, you can cash them in for rewards. In some cases you can get airline tickets, others offer gift cards and still others offer cash back rewards, sending you a rewards check.

It’s generally that simple, with the only possible catches being that some credit card companies limit the amount of rewards points or cash you can get back in a year and others have expiration dates on your points.  Also keep an eye on the interest rates and annual fees. Many rewards credit cards have high rates and high annual fees to offset the rewards they will give out for your credit card usage.

The good news is the deals and bonuses being offered are getting better by the day, thanks to competition. All credit card companies are trying to get more customers. The more people they can have using their cards, the higher their potential profit.

This would explain why they have to advertise these great deals. There are so many companies offering reward points on their credit cards, each one is trying to make a name for their company and offer, so you will select their service.

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