Not all credit card rewards are the same. Read the guide.

By: Michael Huch

redit card companies always have been trying to encourage their clients to use their cards more and more. They offer lots of different points, rewards and frequent flyer miles to reward you for using their card. Each credit card company offers different type ofrewards. The best thing to do is to compare cards to see which one has the rewards that you are interested in.

The cash back rewards credit card is the way of you bank say thank you. They give you back some money on every purchase you make. Some of them start from writing you 25 or 50 dollar check after you make a first purchase. Then they keep on paying you a percentage from every purchase you make, usually its from 1% to 3%.

Point rewards is another way credit card companies reward you for using their card. Each bank offers different points and different rate. Some reward extra points on your first purchase and points for other things like buying gas with the credit card, buying groceries and prescription drugs: usually all purchases that get you points. You may heard of short-term promotions on the radio or TV, when large retail stors give you double of triple rewards for the purchases made during any given weekend.

Once you earned enough points, you can redeem them for gift cards, collectibles or check.

For people that travel a lot, airplane companies offer credit cards with frequent flyer miles. When you commit a purchase with the credit card, you earn a certain number of miles for each dollar you spend. Whan you have accumulated enough miles, you can travel wherever you want: make a business or pleasure trip. When you are applying for a credit card with frequent flyer miles, you need to make sure that you can redeem your points with no worries and blackout dates. You also want to make sure you can go wherever you want to go and there are no restrictions on destination. Frequent flyer miles could save you a lot for that family vacation.

To help you choose the card you need, try to think of what do you spend your money on. For example, if you have relatives in Alaska and visit them a lot, it might make sense to apply for Alaska Airlines credit card in order to accumulate points for every time you buy a ticket from this company. May be every 3-rd trip could be for free or with very good discount! Think of applying for a gas points card if you spend a lot of time in your vehicle. Think about hardware store points card if you are a constructor.

All these rewards are great, but have to be careful and do not spend too much money in order just to earn enough miles for the trip for two on Bahamas. The truth is that if you had saved the money you spent on the spending spree you probably could have paid for the trip in the first place. This is the kind of mindset that the credit card company is hoping they can get you into because even though they may give you two miles for every dollar you spend they are making a lot more money than you think. Not to mention how much money you need to spend using this credit card to pay off a family vacation. Doesn't matter what you do with your card, you need to be responsible.

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