Not all credit cards offer rewards. With those that do, there are varying ways to redeem and earn rewards. Most cards offer you rewards after eligible purchases. Purchases that don’t fall under eligible are interest, gambling, card fees, cash advances, balance transfers, money orders, and gift card charges.
Credit card rewards
There are different kinds of rewards. These include miles, points, and cashback. With cashback, you can get your money back through a check or by having your issuer transfer it to your bank account. You could also get it in the form of a gift card or statement credit.
Points, on the other hand, can be for paying purchases. Moreover, some card issuers will allow you to convert your points into miles or cash. While you can use your miles on an airline of your choice, co-branded cards will give you miles to a specific one. A cardholder could use their flyer miles to secure a free flight or reduce airline changes, including purchases linked to their travel. Cashback is typically the amount of money you spend on an eligible purchase. Points and miles, on the other hand, are the amount you spend on an eligible purchase multiplied by a fixed number. Furthermore, your card issuer could limit your reward to a particular period and rate.
The are various methods your card issuer can give you rewards, including a referral bonus, sign-up bonus, quarterly rotating, tiered, and flat rate.
If you keep your account open, you could accumulate these rewards. Note that some card companies will revoke rewards if you don’t use your card for some time. Additionally, you do not get your rewards if you close your account.
Converting miles and points to cash or non-cash items
Sometimes you could convert miles and points into cash at a set rate. However, this rate could vary when you convert them into other non-cash items. There are several reasons for this.
One reason is that different airlines give rewards differently; thus, a free flight might cost you more points in one airline and less in another. Another reason is that flight costs can vary within an airline depending on the day destination and when you book the ticket.
