Rewards Credit Card: Spend More & Get More

2007-03-08 10:33:40

( Financial )



INCENTIVES PROGRAM

As people are getting more and more prudent at using their credit cards for fear of falling too deep in debt, banks and other credit card companies on the other hand are scrambling to find more novel ways to encourage consumers to use them.

Just a fairly recent innovation is the rewards credit card. Rewards credit cards are still your standard credit card except that they offer incentives or bonuses depending on how much you use the credit card and the amount you charge on it.

The rewards credit card offers many forms of rewards; some offer cash rebates, but the more common is the bonus points system. In this system, you earn a corresponding point everytime you use your rewards credit card. The points you earn can then be used to exchange for items such as gift certificates, electronic gadgets, appliances, etc.

REWARDING THE BIG SPENDER

Both the rebate and point system works the same way. You earn them for every corresponding amount you charge on your credit card. For instance, for every twenty dollar that you charge on your account, you get two bonus points. For a certain period of time, you can accumulate these bonus points and then exchange them for a corresponding item. The higher your points, the better the item you get.

Most credit cards now offer the rewards system as an incentive. You do not have to avail of these rewards credit card separately as they are automatically made available to you if you are a current credit card holder. Among the popular types out there are the Chase reward visa, the Discover card rewards, and the Citi card rewards – all these cards offer prizes and gifts and come bundled with other value-added features.

The concept of rewards credit card is a great marketing move on the part of the credit card companies. The incentives program makes the clients feel valued even as they are being persuaded to spend more.


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