Rewarding Credit Card Applications for Those With Great Credit

Some people are rewarded every day of every month. They are rewarded for their efforts in diligently saving money, spending frugally, and regularly meeting their financial obligations on time. They have established an impressive credit profile, and have never carried much debt. And how are they rewarded every month? You are sent mounds of envelopes that say ‘You’re Pre-Approved”.

You can always count on being overwhelmed with credit card applications. You will receive them if you are a person with good credit history and an impressive credit report. You may want to toss them out right away. Instead, take some time to examine some - some might actually be worth investigating. You have the good credit, that means you may as well use those advantageous perks, right? You just have to determine what seems reasonable to you.

The World of Reward Credit Cards

The incentive programs today are vast. There are frequent flyer cards, hotel rewards cards, frequent flyer cards, gasoline credit cards, points rewards cards, cash back credit cards, and bonuses such as discounts, vacations, matching your dollars toward college savings and cars.

Credit card companies have been substituting them with the kind of extras most of consumers want. Most of the perks today can be placed into one of the two categories - reward programs or cash back programs. Credit card issuers have found the strongest incentive for people thinking twice about filling out an application for a credit card to be a point rewards program.

Cash-Back Cards: Money Back In Your Pocket

Cards that offer cash-back programs can be attractive. There are those that offer a flat percentage rebate (1% usually) and plastic with a tiered reward system that ranges from .025% to sometimes more than 1%, depending on what you spend. Add this on top of an attractive introductory offer of a 0 APR credit card and you have a card that is very attractive.

The flat percentage rates on cash back rewards cards are cards that give a flat rebate on the amount of money you spend on your card. Usually this is 1%, but some can go up to 5-10%. For example, if you had a plastic with a 1% rebate, you’d get $350 if you spent $35,000 during one year. Remember that most of the cards cap the amount received on the cash back rewards cards. Some cards also require you to carry a balance from one month to the other to count on the rebate. In most cases this would nullify the benefit considering the high rates that are charged by cards.

A tiered percentage rate typically pays rebates that range from 0.25% to sometimes more than 1%, depending on what you spend.  These cards will be useful if you spend much more annually. The payout though would are given to be less than what you get with a flat percentage rate plastic if you normally spend just $5,000 or $6,000 per year. Some cards offer a higher rebate on selected or target spending, but a lower rate on other card activity.

Rewards:
Rewards cards offer members rewards based on annual spending and they come in the form of travel, services and merchandizes.

Points Rewards Cards & Frequent Flyer Cards - these cards reward spending from hotels, vacations, and cheap airline flights. You will get one or several point rewards (or miles) for each dollar spent. These, in turn, can be redeemed for specific services related to traveling. Something to consider is the high annual fee that most charge anywhere from $50 to several hundred dollars. Taking this into consideration, you should only get such a card if you’re a frequent traveler and can accrue miles and point rewards to receive your bonuses.

Retail cards - these work just like points and miles cards, except when it comes to the rewards. They can come in the form of gas cards, Sears, Starbucks, etc. Most of these offer discounts for their own cash back or merchandise programs. These programs provide enhanced discounts or rebates when you spend in their own store.

Auto - Many automakers offer programs that give incentive to spend by offering rebates toward future car-related purchases. GM for example has a 5 percent rebate program on all purchases. And you can then accumulate bonus points and put it towards a new automobile. Small business credit cards usually offer this benefit to companies that frequently purchase vehicles.

Investments - These are cards offered by financial services institutions that offer bonus points used as rebates to be invested in mutual fund accounts, qualified accounts or in cash.

Rules of Thumb for Maximizing Bonus Points on Your Credit Card.

• Do not use more than two rewards cards. Having too many cards can reduce spending and you will end up not getting significant rewards.
• Ask your card company for a better deal if you’ve been using your card for a while. Shop around for other best deals. You may find that a new card company or your current bank will be eager to have you as a client so much they might offer you a better deal.
• Crunch numbers to understand whether a deal is advantageous for you. You must weigh the incentives against the higher interest rates and fees.
• Understand the terms before you fill out the credit card application. Know what the annual fee, APR, grace period, late payment charges, penalties, cash advances, over-the-limit fees, etc. are. Know under when and how your credit card company can change your rates.

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