Among the different types of credit cards offered to consumers today, rewards credit cards are among the juiciest and most “rewarding”. These cards allow users to earn from their purchases, get discounted rates, and even travel for free. The rebates offered by rewards cards, just like cash-back points, can also be used for making new purchases, or for paying your credit card balances. The other perks of having rewards credit cards include travel accident insurance, emergency card or cash replacements, and no liability on unauthorized charges. Here are a number of helpful tips on how to pay for your reward credit card purchases.
What Are The Different Types of Rewards Credit Cards?
According to credit card experts, there are three basic types of reward credit cards today – cash, points, and miles rewards credit cards. Cash reward cards allow their users to redeem cash points as a credit to their account. Other companies send a check, or make a deposit to the person’s bank account, each time they wish to redeem the reward. Points rewards cards are usually given based on each dollar spent by the card owner.
The points can be redeemed for merchandise in the reward program’s online shopping mall. And depending on the card issuer, the individual can also redeem the points for cash, travel or gift cards. Miles or travel rewards credit cards provide users with free miles, which they can redeem in the form of airline tickets.
How to Pay Off Your Rewards Credit Cards Purchases
- Make sure to keep all bill payments on a checkbook ledger, so that you can keep track of your payments each time you receive your credit card statement. Some credit card firms allow their users to set up automatic bill payments with their credit card. Users should constantly monitor these charges online, to ensure that their spending does not go out of control.
- Pay Your Bills In Full. Most credit card providers today allow their clients to set a grace period during which their purchases will not accumulate any interest, but only if they pay their balance in full. If you fail to pay your balance in full, you may end up paying interest on your purchases, and in most cases, the interest fees will end up costing more than the rewards points you earn.
- Pay Your Bills As Soon As Possible. Instead of waiting for your credit card’s due date, pay your bill as soon as you receive it. This lessens the risks of mail error system malfunctions, which cause you to make late payments. Most credit card firms will allow you to install account alerts, which notify you when the new statement is issued.
When using your reward credit card, remember that even one late payment will count as a “default” under the terms and conditions of your card agreement. Thus, you may be subject to higher interest charges and late fees.
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