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Credit Cards Blog
Travel Rewards Credit Cards have become the
latest rage in the credit card industry.
In the past, consumers shopped for credit cards that offered
the lowest
interest rate. Next came cards with low interest rates and
no annual
fees. Today, consumers can shop for cards based on what type
of "reward"
they can earn for using a specific issuer's card.
A recent survey found that nearly half of U.S. cardholders
enrolled in
a credit card rewards program have never redeemed their
points.
However, 60% of consumers said rewards program influences
their decision when
deciding which credit card to use for a purchase.
How does a
Travel Rewards Credit Cards program work? Typically, the program
awards points,
"dollars" or a cash value based on the amount you charge.
The rate at
which you collect points varies depending on what you charge
or where you
charge it. Some programs offer extra points for using their
card at a
specific place such as a supermarket or fast food restaurant
or for
certain items. Some
Travel Reward Credit Cards programs offer a variety of rewards.
Consumers can earn
meals, tickets to sporting events, airline tickets,
electronics, or
even create their own reward program.
Upward of 50 credit cards reward their customers with
flights,
upgrades, car rentals, hotel stays and cruises. Each card
differs in the kinds
of perks and the ways they're doled out.
The
United Airlines Mileage Plus
Signature Visa and the
Continental
Airlines World MasterCard,
both from Chase Bank, award
customers one mile for every dollar charged. Sometimes you
can pile up miles at an even faster pace: After your first
purchase, the United Visa awards 17,500 bonus miles as well
as a certificate for a one-way seat upgrade, and the
Continental card always gives double miles when it's used at
Macy's, Avis, Bed Bath & Beyond and other partner
establishments.
With airline-affiliated cards, miles accrued through
purchases and miles earned through flying are
interchangeable. They're combined into the same
frequent-flier account and can be traded in for free flights
and upgrades.
The Capital One No Hassle Miles card from Visa gives
customers up to two miles for every dollar spent, there's no
annual fee, and miles can be redeemed on any airline -- even
foreign airlines and carriers such as JetBlue and Southwest.
The MBNA WorldPoints Platinum Plus MasterCard and Discover's
Miles Card likewise allow you to build up points -- one per
dollar charged -- with every purchase, and the rewards
include flights as well as cruises, cash, and gift
certificates from the likes of The
Home Depot and Toys "R" Us. And when it comes to reward
flights for all of these cards, there are never any blackout
dates.
No
Travel Reward Credit Card
program is more flexible than cash. The Citi Dividend
Platinum Select MasterCard pays you back 5 cents for every
dollar charged at pharmacies, gas stations, and grocery
stores, and a penny for every buck spent otherwise. American
Express's Blue Cash Card begins by paying you 1 percent on
many purchases, and after you've spent $6,500 that year on
the card, the rebate bumps up to 5 percent.
Many of hotel-branded credit cards, including the
Hilton HHonors
Platinum Card
by American Express and the Priority Club Rewards Platinum
Visa (for Holiday Inn and other InterContinental hotels),
don't charge an annual fee. Cardholders build up points to
be exchanged for rooms, meals, parking and spa treatments at
hotels, as well as rewards that range from golf clubs to
iPods through partner companies.
Capital One doesn't add any extra charges and even absorbs
the 1 percent fee from Visa or MasterCard when used outside
of the U.S.
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