Cut That Personal Connection With Your Credit Cards!

Ahh, love! Romantic escapades, red roses, chocolate, red wine and…credit cards. What!? Granted, we don’t normally associate those little plastics with romance, unfortunately our love affair with credit cards and their rewards seems to grow stronger each year.

Most of U.S. households have more than one credit card and they prefer to collect some type of rewards from those cards. Believe it or not, some cardholders can get hundreds of dollars in airline tickets, gift cards, or cash each year just for using reward cards for your daily purchases. You can get $1,500 back each year simply by being smart about the way you use your cards.

If you're not currently getting a slice of this savory pie, you must have been lived under a rock for years. Reward cards are one of the best credit card deals available to you. When you discover the delights of using one, rest assured that you'll never again use any cards that give you nothing back. If you are already getting a big piece of the pie, then you should aim to grab you an ever-bigger slice in the future. Cash-back reward cards, gas rebate cards, airline reward cards, and other types of reward cards may boost your bottom line with unusually trivial efforts on your part. Discover surely deserves much credit for changing the card industry by introducing the earliest cash-back, no-fee cards.

The card promised a cash rebate of nearly one percent on all purchases made. Previously, most cards had annual fees and no one ever heard of cash rewards. Discover’s innovative card was definitely unique, no one had ever promised a no-fee card that gave back some cash to the consumers. Airline reward cards, which usually offer frequent-flyer miles for all purchases you make on them, began to grow in fame. When Citi/AAdvantage card was introduced in 1987, it was among the first cards to offer miles that might be redeemed for free tickets.

One of the major reasons for their increasing charm is the strong competition among card providers, who have grueling works to make their credit cards stand out amidst the deluge of offers consumers get every year. Enticing us with rewards is a good way for getting us to take their cards. That’s why they tend to include more sales pitches on reward cards than non-reward cards in their direct-mail campaigns.

Those programs have become so widely used in the last couple of years that it’s difficult for card providers to compete in today’s financial industry without offering rebate programs. Even better, from our point of view as cardholders, their rivalry means progressively generous rewards. You are maybe amazed at how providers are continuously trying to one-up each other with ever more tempting cards. Until three or four years ago, reward cards usually offered a one percent cash rebate or one reward point for one dollar spent. And now it’s not unusual to see reward cards giving rebates up to three percents and even up to five percents on certain transactions. Imagine getting five percent back just for using those plastics. That’s more than we used to earn on our savings account at the bank! Adding to this, we are forced to pay taxes on the interest we earn with our savings account. Of course, rebate cards are tax-free.

This fierce competition is working to our advantage in another way: providers are seducing us with more compromising redemption options. Traditionally, reward cards allowed people to earn only airline tickets, cash rebates, gift cards, and other narrow selections of merchandise. Lenders are now seeking to woo us by offering many more options in how we can make the best of our rewards.

When Chase introduced Freedom Card, they marketed aggressively through flashy TV advertisements and gave cardholders more control over their reward choices. Consumers can choose gift certificates, cash rebates, car rentals, hotel stays, travel on many airlines, and/or a vast array of merchandises. Issuers will no doubt offer other reward cards and adapt their existing programs for higher flexibility and better customer control.

And their fame will likely to grow as those programs become increasingly targeted and specialized to tempt niche markets. As a whole, credit card rewards programs become more versatile and are tailored for particular market segments based on their lifestyles, desires, and needs. Thus, affluent people may be offered elite high standard experiences such as a $25,000 engagement ring or maybe even a trip into space someday... (No kidding!). As a result, the Internet has helped to satiate Americans’ seemingly unquenchable appetite for card rewards.