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Reward credit cards are increasingly one of the most popular choices on the market. Consumers who are spending on plastic are looking for the best value for their money from their bank. Instead of spending money with nothing to show for it but a credit card bill, many are now taking the opportunity to earn points or similar rewards for every pound they spend.
The challenge is to research and decide on a credit card that best suits your individual needs. With a choice of reward credit cards available, it's wise to have a very clear view of your spending habits to ensure you choose the card that best matches your lifestyle.
Retail Points
Retail reward cards have long been popular, such as Nectar card. By spending across a range of stores, points are gained that can in turn be redeemed in a variety of locations. If the card is used for things you're spending on anyway, this is a useful way to make savings. Reward credit cards operate on the same basis, with reward points accrued on your spending, with a number of ways to use them - typically on shopping or travel.
Cashback
Another reward card option is the cashback credit card. This type of card suits consumers who use their credit card for either the majority of their purchases or for a few large transactions. The more money you spend on this card, the better the reward. However, these cards are best suited to those who clear their credit card balance in full each month, as any interest incurred will cancel out the benefit of the cashback. If you use a credit card in this way and are considering a cashback card, look around at the various offers - some cards have introductory offers with generous cashback percentages.
For many typical shoppers, a reward credit card that gains points that can be used in a wide variety of places may be most suitable. The key to making effective saving is to find a card that matches your lifestyle and offers you savings on spending that you would be making anyway. If you find a reward card that lets you build reward points on your everyday spending, that can then be used on things you would buy anyway – flights, clothes, or meals out – then the benefits are clear.
The best tip when thinking about getting a credit card is for you to do your research. Figure out where you spend the most money, how much you use your credit card and identify in which area of your budget you’d like to make savings. This will help you to plan ahead and find the right card for you and your financial needs.
About Author: Catherine Halsey writes for a digital marketing agency on a range of subjects.