If you’re after an additional source of passive income, a rewards credit card can be an excellent option for you, as long as you make regular purchases. Cash back , plane tickets or general spending points are just a few of the advantages you have, while some cards allow you to earn additional points when you make online purchases!
Still, there are a few aspects which you should know before deciding upon a rewards credit card.
- A good credit score is needed in order to apply for one.
- You shouldn’t generally carry a balance, due to higher annual percentage rates.
- It’s recommended to travel regularly.
- You should stick to a particular airline.
- You spend a lot on gas, groceries and restaurants.
Also, you should be well informed about the types of rewards credit cards you can opt for, in order to fully enjoy their benefits! Specifically, we’re talking about:
Cash back credit cards with bonus categories
Most of them offer around 2% cash back on groceries or gas, while other offer rotating categories, like restaurants, movie theaters, wholesale stores or even online retailers.
Flat-rate cash back credit cards
The major difference between this category and the previous is that with a card like this, you will get between 1% and 2% back on all purchases, no matter your spending category!
General travel credit cards
Basically, this is a low-maintenance way to earn points for hotels or flights, spending just like you usually would. Most cards of this type offer a spending portal that allows you to book with your travel points at special prices.
Co-branded credit cards
Great for those who have a preferred airline or a hotel chain, since this type of card can help you get to your next trip faster, through flight and room points. Pretty cool, huh?
Finally, there are three more aspects you should be aware of: annual fees, which can sometimes be pretty scary, foreign transaction fees and card acceptance, as well as cardholder perks. Make sure you get all the info about them too, before picking your final rewards credit card!