With so many different types of credit cards on the market, it can be hard to know which one is right for you. Then there’s the bigger question – are rewards credit cards actually worth it? If you’re a millennial looking for a rewards credit card, this guide is for you. We’ll go over everything you need to know about how rewards credit cards work, and how to decide whether a rewards card is the right choice for you.
What are Rewards Credit Cards?
Rewards credit cards are pretty much exactly what they sound like – credit cards that offer rewards to cardholders in the form of points, cash back, or miles. These rewards can be earned in a variety of ways, such as spending money on everyday purchases, shopping at specific stores, or using the card to pay your bills. Depending on the card, the rewards can be redeemed for things like travel expenses, gift cards, merchandise, or cash back.
There are two main types of rewards credit cards: personal and business. Personal rewards credit cards are meant for individuals who want to earn rewards on their everyday spending, whereas business rewards credit cards are meant for small business owners who want to earn rewards on their business expenses. Both types of cards come with their own set of perks and benefits, so it’s important to choose the right one for your needs.
How do Rewards Credit Cards Work?
Rewards credit cards work by giving you points, cash back, or miles for every purchase you make with the card – the more you use the card, the more rewards you’ll earn.
Some rewards credit cards also come with sign-up bonuses that allow you to earn a large number of points or cash back after meeting a certain spending requirement within the first few months of opening the account. For example, a common sign-up bonus is earning 10,000 points after spending $1000 within the first three months of opening an account.
Another way to earn rewards with your credit card is through special promotions that many issuers offer throughout the year. Some issuers might offer double or triple points on all purchases made during a certain time period, for instance – promotions like these allow you to accelerate your earnings and redeem your rewards even faster.
Why Should I Get a Rewards Credit Card?
There are several reasons why you might want to consider getting a rewards credit card for yourself or for your business. Maybe you travel often and would like to redeem your rewards for travel expenses such as flights, hotels, and rental cars. Or maybe you prefer cash back so that you can use the money however you’d like.
Here are some other reasons why you might want to consider getting a rewards credit card:
- Earn points or cash back on your everyday spending
- Take advantage of sign-up bonuses and promotional offers
- Earn points or miles that can be redeemed for travel expenses
- Use your points or cash back however you’d like
Whatever your preference may be, there’s sure to be a rewards credit card that’s right for you.