Credit Facts

Credit cards offering rewards have become big business in the credit card industry. A few years back consumers looked for credit cards that offered a low interest rate. That sparked the demand for credit cards cards with low interest rates and no annual fees. Today many consumers look for credit cards based on what type of rewards the card issuer is offering.

Rewards may include airline miles, cash back on purchases made with the card or services and points that can be used to purchase products or services. The rate at which you collect these rewards vary depending on what you purchase and where. Some providers offer a variety of rewards. Card users can earn free hotel rooms, airline travel discounts, restaurant  meals, car rentals, gift cards and even cash deposited to a savings account.

The goal of the credit card provider is to get you to use your card as much as possible. The credit card issuer makes money every time you use your card from merchants that pay a fee every time a transaction is made. They also stand to make money from card users that don't pay the balance each month on interest charges and late fees. A recent survey shows that over fifty percent of consumers polled said that a rewards program influences their decision when deciding which credit card to use for a purchase.

If you are considering an offer for a credit card that offers rewards, be sure to read the fine print. Find out what you have to do to earn your rewards and check for any restrictions as to when and where you can use them. Also check to see if your rewards have an expiration date. Reward programs benefit consumers who pay off their balances monthly. For those who carry a balance or pay late, the resulting higher balances, interest and fees will offset the benefits of the reward received.