Rewards Credit Cards: Non-cash

Dec 9, 2009

Rewards credit cards come in several varieties, in addition to cash back. They are generally offered only to individuals whose credit is rated “excellent” or “very good.”

Some have no annual fee, while others, with more generous rewards, carry an annual fee of up to $450.

The rewards card you choose should reflect your lifestyle and the way you use your credit card.

Two of the most popular are “miles” and “points.”

Miles, of course, refers to airline miles. Some cards are specific to one airline and some are universal. Some give miles for all purchases, and some only for travel-related purchases. Some offer 2 miles per dollar for travel purchases and 1 point for all others.

Often the card offering the most miles per dollar also comes with a higher interest rate, so it pays to compare all the features. Unless you pay your balance in full each month, the rewards can quickly be eaten up by the higher interest rate.

Points are awarded in a similar fashion, with some cards offering points for every purchase, and some for only specific purchases. If the majority of your credit card purchases are for gasoline, choose a card that doubles credit card rewards for gas purchases. If you spend more shopping at a grocery store, choose a rewards card that rewards grocery store purchases.

Some cards give double points for week-end spending, so do carefully consider the choices and pick a card that rewards the way you spend money. With the dozens of offers available, you’re sure to find one that compliments your lifestyle.

You may even want to use different cards for different kinds of purchases. Some consumers find it convenient to use one card for all gasoline purchases so they can pay the balance in full each month and earn rewards, while using a different card with a lower interest rate for larger purchases such as appliances or auto repairs.

You should, of course, use a separate card for business purchases than personal purchases. Not only will your statements give you a clear record of expenditures, but you may be able to deduct any interest you’ve paid over the year. If you mix personal items with business, that interest will probably be denied. *Check with your tax preparer for details.

Before you choose a “Points” rewards credit card, study the offers. Of course you’ll want to compare interest rates, but you should also compare the kinds of merchandise for which you can redeem your points. Then compare the number of points you accumulate per dollar spent against the cost in points for merchandise you might want.

A few rewards credit cards, such as the Advanta Customizable Platinum Business Card with Unlimited Rewards, let you choose between cash back, travel, and merchandise.

One sometimes overlooked rewards credit card: Charitable Giving

Charitable giving rewards credit cards are another option. If you have a favorite charity, go to its website and check to see if they offer a credit card. This is a painless way to give.

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