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Credit Card Reward Schemes
Everyone understands that the great offers advertised with credit cards are designed to invite you to become a customer, but we also instinctively work out that there must be a catch. Well, with credit cards, you can get the benefits and avoid the catches.
Branded Reward Schemes
A typical credit card reward scheme is one where you'll earn points, usually with a branded image such as Air Miles or Nectar. Other times the rewards come in the shape of gifts selected from a catalogue, offering them outright for a set number of points or as "special offers" that allow you to use some of your points to gain a discount on an expensive item.
Who Pays?
So now you're asking yourself, "Who pays for all this?" and concluding that it must be you. In fact, the credit card company foots the bill, and they earn their money from customers' interest and the charges that sellers pay to accept the card. Because shops are not allowed to add a surcharge for credit card use, the price will be the same whether you use cash or credit, so if you buy with your credit card and pay off your card monthly, you really are getting the rewards for nothing.
Credit Card Reward Benefits
So if you're looking around for a card and you find a reward scheme that interests you, use your card this way and you'll truly benefit. If you don't plan to pay off your card monthly, however, the interest you pay will probably exceed the value of the rewards, so you are as well continuing your search based on the optimum interest and charges.
