January 06, 2006
Reward cards
What type of credit card do you hold – regular or reward card. Chances are you already have a reward card with your regular credit card or are planning to get one soon. So what is it about these cash-back cards that have people gunning for them? It’s simple human nature. Not many people can say no to rewards that are offered for doing what you like to do most – shop. It’s just too tempting. So let’s have a look at this segment of the credit card market, which is growing at an enormous rate – at last count, over 32 million people across the country were using reward cards!
The credit card industry is not known for its generosity. On the contrary, high interest rates, and changing terms and conditions are more de rigueur in this industry. So the very fact that these companies are today offering cash or rewards to people who shop with their cards may sound a bit absurd. But not when you realize that they are now banking on something businesses have done from time immemorial – customer loyalty.
When any credit card company offers a cash-back or reward scheme for using its credit card, customers are known to usually use this particular card more than the regular ones. So now you have companies like Discover giving away almost $500 million in 2005 alone. Discover was the company that introduced the cash-back scheme nearly two decades ago. Soon other credit card companies like American Express, Citibank, Visa, and many others were offering reward cards and business was booming.
So how good are these cards for customers? Do they come with some hidden charges or are they simply what they claim to be? Questions any persons should ask him/herself before going in for a reward card.
If you were to go by customer surveys, this industry is yet to peak. People are in general very happy with these cards. Only one thing, you need to find out which card suits you and your wallet best. You only need to remember one thing: your choice of card depends on what kind of shopper you are – you buy books, grocery, or clothes. So it is important to know more about every card before you choose the one that is right for you.
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