With the holiday season in full swing, now is a good time to use a rewards card. You're likely to be spending more than usual anyway – you might as well get a few perks in the process.
Which rewards card is right for you depends on a couple things. First and foremost, you want the card with the lowest interest possible. A rewards card isn't much help if you'll be paying more than the value of the reward in interest.
You also need to choose a reward type that's right for you. If you're afraid of flying, a card that offers airline miles probably isn't a good choice. However, if you travel a lot, it can be a great choice. Rewards cards offer three basic types of rewards: rebates, points, and miles. Rebate cards give you back a percentage of what you spend – usually 1-2%, but it varies from card to card. Some cards let you earn more for certain types of purchases, or give you an extra incentive when your reward is applied towards certain purchases. Point cards give you a certain number of points per dollar spent – 1 point per dollar is common. These points are then redeemable for various merchandise or gift certificates. Miles cards give you frequent flier miles for each dollar spent. These miles can then be redeemed for airfare. Type that's right for you depends on what you like to do. If you're constantly doing home improvement tasks, a card that offers points towards gift certificates at a home center might be a good choice. If you get new cars every couple of years, a rebate card that offers a bonus for buying a specific brand of car might be useful to you.
It's up to you to check out the rewards on offer and determine which suits your needs. If you look at our rewards credit card page, the basic type of reward for each card is listed under "Reward type" and the full review details the specifics of the rewards program.
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