Business Terminals

Why Consumers Love Getting Credit Card Reward Points

Who doesn’t like getting more bangs for their bucks? It’s a simple fact of running of business. When you provide more value to a consumer, he/she is bound to make more purchases from you. Or…in the case of credit card providers, when you provide more value to cardholders, they’re bound to make more purchases with your card.

Credit cards that offer rewards are very popular. By using them, you don’t just get what you pay for. You’re rewarded with points that will inevitably enable you to get something for free. The concept makes you wonder why we don’t all use credit cards that offer rewards.

You can even get rewards just for signing up.

An excellent incentive for using a credit card that offers rewards is the fact that you can be gifted for rewards just for signing up for the card. As Kevin Mercadante points out on MoneyUnder30.com, points can be earned through two primary methods – sign-up bonuses and purchase rewards.

“For sign-up bonuses, you’ll typically earn a large number of points after making a specific dollar amount of purchases within the first three months of opening the card,” he explains, “After that, ongoing rewards may offer enhancements for certain spending categories. For example, a typical offer might be 3x or 2x rewards points for every $1 spent on travel or entertainment. Most cards will then offer 1x points for every $1 spent on all other purchases.”

Earning rewards can help you to manage budgets better.

There is an added benefit to earning rewards points with a credit card. The entire process can incentivize you to pay your balances off in full. As Miriam Caldwell notes on TheBalance.com, by paying your balance in full each month, you officially attain the rewards points you earned for having made those purchases.

“A rewards credit card is a good choice only if you are already sticking to your budget and truly paying your balance off in full each month,” she warns, “Otherwise, you are not getting the deal that you think you are. Remember, you need to be financially ready to handle a credit card before you can benefit from a rewards card”.

How to redeem reward points varies by credit card issuer.

It’s important to note that not all credit card rewards programs are created equal. While there are numerous ways to collect and redeem points, each credit card provider has a different policy. As well, not all rewards points have the same value. 10,000 points on one card isn’t likely to have the same cash value as 10,000 on another card. Mercadante notes that, sometimes it may be more worthwhile to get cash back than it is to collect points towards purchases.

“In some cases, reward points credit cards do pay actual cash back,” he writes, “In limited instances, this can be in the form of an actual cash transfer into a bank account. But in most cases, it will be issued as a cash equivalent, such as a credit card statement credit.”

Does your company accept credit cards?

At Unity Payments, we believe that the easiest and most convenient way for merchants to accept credit cards is with the Poynt Smart Terminal. To learn more, please don’t hesitate to call us at 1-800-661-3761. You may also email us at info@unitypayments.ca.

Author

Dan Faraldo