Best Credit Card Machines 802

Credit Card Rewards Programs: Rewarding... Or Not?
By Jeremy Zongker

In 1950, the first credit card that could be used at more than
one, specific merchant emerged on the market. The Diner’s Card,
started by Frank McNamara, was an invention that got its start
when Frank was having a business meeting over dinner, and
realized he had forgotten his wallet at home. Of course, the
man was extremely embarrassed, and had to call his wife and ask
her to bring him his wallet so he could pay for the bill. Then
the light bulb over his head turned on, and he thought it would
be incredible to have a way to purchase things wherever people
shopped, and pay for them later. The Diner’s Card started with
200 card holders, and within a few years- banks and private
companies began offering credit cards.

Eventually there were so many credit cards to choose from that
the credit lenders had to come up with new ways to stand out
from the competition and entice people to select their card
over another. Credit card reward programs were born sometime
around 1986. Discover card began offering cash back based on
the amount of money you spent on your credit card, and the
first “frequent flier miles” for credit card users was with
Continental Airlines. The frequent flier miles were such a hit
that now every airline has joined in the rewards programs,
offering discounted trips, free complimentary airfare, travel
accident insurance- all based on the amount of spending you do
using your credit card.

Now that just about every credit card has some sort of rewards
program in place, once again card companies are finding
themselves looking for new ways to entice more customers to
slide their credit card into their already overflowing card
holders in their wallets. Rewards programs have to be turned up
a notch, and become so amazing, so absolutely unforgettable that
consumers can’t forget them and will apply for and use their
card more than the other seven in their wallets when they go
shopping!

Currently, the trend in credit card rewards programs appears to
be creating cards that offer very specific rewards to cater to
what people are doing with their lives. Michelle Shepherd, of
MBNA Corp (one of the largest credit card lenders) says the
rewards programs are developed with real people in mind,
offering something for everyone “…whatever stage in life a
person is in, whether it’s someone who’s trying to reduce a
mortgage or someone dreaming of going to the Super Bowl”. This
is seen in credit cards MBNA offers with rewards programs
related to NASCAR and GMAC. Also, Visa offers several credit
cards with Disney rewards programs- your spending earns you
points towards travel to Disney theme parks and on the Disney
cruise line.

Credit card interest rates have begun to rise overall, which is
another reason why lenders are trying to entice new customers
with their fabulous rewards programs. It would be hard for a
card to sell itself to new customers with a high, unattractive
interest rate- so lenders have learned to sell the idea of the
rewards programs, hoping to gain your interest from that and
divert your attention from the not-so-glamorous interest rates.

Keep in mind that while rewards programs can seem very
rewarding when you are considering a credit card offer, there
is often a lot of information you won’t find out until after
you apply for and receive the card. Rewards programs often have
limitations, meaning once you reach the ceiling you are no
longer eligible for the rewards program benefits- information
they don’t normally disclose in the credit card offers you
receive in the mail. Also, for rewards programs that allow you
to purchase items with points earned based on the spending you
do using your credit card, keep in mind you will probably be
charged additional money for shipping and handling of those
items. For cards that offer travel discounts and airline
tickets, many rewards programs require you to then pay
transaction fees to redeem them.

About the Author: This article has been provided courtesy of
Creditor Web, http://www.creditorweb.com .

Source: http://www.isnare.com