Credit Cards: Making Your Dreams Come True
People have always had to choose the right credit card for them. But in the past, this choice dealt mainly with interest rates, grace periods, and credit limits. All of this is still true, however, there is one more aspect you will want to consider - customer loyalty plans!
What Is a Customer Loyalty Plan?
Some of the most well-known customer loyalty plans are the frequent flyer programs of the major airlines. Programs such as these have been used to keep customer loyalty for many years. Loyal customers are often treated better than those that buy on the spot. The idea was to reward your customer for being YOUR customer. And the credit card companies, seeing a good idea, do what all smart companies do when they see a good idea - they copied it!
It started with cash back bonuses. Cards like Discover offered a percentage back for everything spent - money you got back for using their card. Then airlines started letting people earn frequent flyer miles not just by flying their airline, but by using their airline Visa or MasterCard. And from there, the sky has been the limit!
What Kinds of Plans Are Available?
Besides cash and plane tickets, you can go to Disney World, earn free gas for your car, get merchandise from your favorite store like REI or Saks Fifth Avenue, or even get free groceries. But don't let your mind stop on the obvious!
Have you ever wanted to own your own island? Well, that may be a bit far fetched, but you can use your credit card to earn enough points to rent your own island!
Is you child just dying to go to space camp? Find a card that will let you earn the credits to send him to NASA for five days!
Some cards are very specific and allow you to only use your points towards something specific, like a GM car. Others offer you the ability to use your points towards a variety of opportunities. So, whatever you have always wanted to do or see or buy, now is the time to find a credit card that will help you turn that dream into a reality.
Calculating the Costs
Just as not every card is created equally in the "interest" department, neither are they created equally in the "point" department. Some give you one point for every dollar you spend. Some give you more and some give you less.
Just as importantly, however, is what is the redemption like? Is one point worth a dollar when you redeem your points? Probably not! Most cards average about $1 for every 100 points.
There are times, usually with special promotions, that you can earn more points for every dollar spent. If you get a loyalty rewards card, it is very important to be aware of these promotions. If you are planning to buy a plane ticket to Florida, it might be best to do so Oct 15th when the rewards points are doubled than wait until the 16th when the promotion has ended!
And speaking of spending, be sure to put all your purchases on your credit card to accrue your points more quickly. However, this is true ONLY if you have the money to pay the balance in full at the end of each month. If you don't, then the interest paid will quickly end up costing you more than the points are worth.
Finding a credit card that meets your needs is getting easier and easier to do. Simply determine what you like to do and then go out there and find a card that will help you pay to do it!
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