There are a number of different types of credit card rewards programs on the market today, giving consumers a lot of different options on how to use their purchases to their advantage. Some of these cash rewards credit cards translate credit transactions into cash paybacks, giving the consumer the option to use the money for whatever they want.
One of the first cash rewards credit cards to emerge on the market was the Discover card. Advertising itself as “the card that pays you back,” the Discover card would repay its customers annually with a certain percentage of the total they spent using the card. This new concept quickly drew droves of new customers.
Once the popularity of these cards was established, card companies began to offer cash rewards credit cards of their own. Credit card companies like Citibank, Capital One, and others offering Visa and Mastercard credit cards, as well as American Express are now also offering cash rewards credit cards. For every dollar spent, a point is accrued, and those points can be used for a variety of purposes, depending on the amount of points earned and the type of program designed by the credit card company.
Some cash rewards credit cards offer repayments monthly or bi-annually, so the consumer may get to totals for desired objectives faster. But some of the better cash rewards credit cards require the consumer to pay a substantial membership fee upfront before any points are accrued. The credit card issuers believe the ability accrue rewards faster will attract applicants in spite of the upfront cost.
Credit card rewards programs are becoming increasingly popular, as card users look for more out of their credit cards. The opportunity to translate their grocery and gas purchases into an something like an all-expenses paid trip is highly appealing to many consumers.