If you’re new to the world of credit cards and credit reporting, there are many credit card rewards available to qualified applicants. These credit card companies provide these rewards in exchange for using their card for certain purchases. For example, cashback rewards credit cards and travel rewards credit cards give you a percentage of cash or points after making these purchases.
It’s a great concept if you manage to pay the balance on time each month consistently. In which case, it becomes a situation where you receive free money, products, or services. The products that qualify are products you’re likely already buying and using anyways, such as gasoline for your car or groceries.
Benefits of Paying Off Your Balance Each Month
Let’s review the benefits of keeping no balance on your credit card. If you have a credit card, you already receive a credit card statement each month. Your balance is the amount that you have used the card without paying for yet.
The credit card company has already included both your previous balance and that current month’s transactions. They have also included the interest and any additional fees they would charge you in that balance. However, the interest is only calculated on the balance that you carried over from the previous month.
The current month’s charges only reflect the transactions you made without interest. So, if you didn’t have a balance from the previous month, you only need to pay for your current month’s transactions. In other words, keeping a $0 balance on your credit card means that you don’t need to pay any interest to the credit card company.
Cashback Rewards
If you have a credit card that offers you cashback on your qualifying purchases, you receive a percentage back in cash each time you use that card for one of those purchases. It works on a percentage basis. So, for example, if you spend $100.00 on groceries and use a cashback rewards credit card with a 1.5% cashback rate on groceries, you’ll receive $1.50 back.
The exact amount of cash rewards you receive is based on the percentage outlined in the agreement you signed with the credit card company when you got the card. These rewards sometimes come in the form of points as well. If the company counts the rewards as points, you’ll likely be able to redeem these points for free products on an online platform the credit card company has set up and maintained.
Travel Rewards
If you like to travel either for your business or pleasure, you can also apply for a credit card that lets you earn rewards that go towards travel expenses. This rewards system works in the same way as cashback rewards in that a certain percentage of your qualifying purchases is given back to you in miles or a points system for traveling. So, when you use your credit card for specific products or at certain stores, you can earn points or miles towards things like airline tickets or free nights at participating hotels.
With either of these types of rewards cards, you really can end up in a situation where the credit card company pays you to use their card on specific purchases. The best part of this concept is that it’s not limited to one or two credit card companies.
Sign Up to Start Earning Credit Card Rewards
Most banks and companies that offer credit cards will have a rewards card that you can apply for. So not only can you boost your credit scores with the credit reporting bureaus, but you can also actually earn money from buying products that you’re probably already buying anyways. Who wouldn’t want to earn free cash, products, or services?
It’s vital that you read through the details of the terms and conditions of any credit card in its entirety. The bank or credit card company will inform you of the interest rate and any other fees and conditions that apply to that card. However, it’s in the fine print that the credit card company lists policies and penalties they have set forth. These policies and penalties apply when you default on one of your payments, don’t pay fees listed in the agreement, or go over your spending limit. Some other conditions may apply as well.
With a cashback or travel rewards card, you can earn free money or products and services just for using the card on specific products that you’re already buying anyways. Plus, if you’re paying off your balance each month, you’ll never incur interest charges. So start earning cashback or other rewards today by choosing a bank and looking into their rewards program. You could gain more than you initially expected if you buy enough of the qualified products and services.