What is the Best Type of Credit Card Rewards Program?
Over the past few years, credit card companies have changed their rewards programs a good deal. Two years ago, it was possible to get a credit card that offered 5% cashback on gas, groceries, and drugstore purchases. Turns out, we credit card users were smarter than the credit card companies gave us credit for being. People would use their 5% cards everywhere they could get the most rewards, then pay their bills in full each month, denying the credit card companies much coveted interest income.
Consequently, many credit companies reduced credit card cash back programs substantially. The same is not true for other types of rewards programs. Airline rewards cards are still offering large bonus miles (and charging hefty fees). And point programs, which can be used for all types of rewards, are still pretty much unchanged.
Our question is simple: What type of rewards program is the best? Below you can vote for the best type of rewards and leave comments and tips on how to maximize rewards.
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February 27th, 2008 at 11:07 am
I use a cash back card, like the Chase Freedom card, which offers 3% cash back on the categories you spend the most in each month. It basically refunds half of the state tax I pay. And I definitely pay my bill every month. The interest rate is over 15%.
February 27th, 2008 at 11:11 am
This is a good card, but you make a great point about the interest rate. Its about 5% higher than a regular card. Definitely only a good deal if you pay your bill every month.
Here’s a link to the Chase Freedom Card application for anyone interested:
http://www.smartcreditchoices.com/showapplication.php?cardid=93147