Life on Credit

The art of borrowing money

Choosing a Credit Card That Is Right for You

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Most people who apply for a credit card use it for a long time, whether to pay for small purchases or big-ticket items. Some customers never switch between issuers while others use their card for years, making the choice of a provider and product an important one. When comparison shopping, the most important factors include your spending habits, credit history, whether you tend to carry a balance, and if you are going to use it to pay personal or business expenses.

Spending Habits

If you usually pay your balance in full and want to collect loyalty or rewards points, then a rewards or cashback card is a good choice. Many issuers offer bonus points across categories such as business-related spending, dining, grocery shopping, gas, and travel purchases. If you are travelling a lot for work or leisure, for example, you may want to look into different travel rewards cards. Scotiabank PassportTM Visa Infinite, for instance, offers users 2 points per $1 on transit, entertainment, dining, and groceries and 1 point per $1 on all other purchases. Spending $1,000 during the first three months earns 30,000 travel rewards points worth $300. Added benefits include car rental discounts, no foreign transaction fees, and complimentary lounge access.

If this is your first card, a cashback credit card is a better option as money back offers are easier to understand than airmile, hotel, and travel rewards. The BMO Cashback MasterCard is one product to look into if groceries make a large chunk of your spending. BMO offers 3 percent back on groceries, 1 percent on utility bills, and 0.5 percent on other eligible purchases. The TD Cash Back Visa Infinite is another good card for household spending if you have a personal income of $60,000 or higher. All purchases earn 10 percent back during the first 3 months and 1 percent after the introductory period. Added perks include concierge service, travel medical insurance, and emergency road services.

Bad Credit

If you wish to improve your credit, then you may want to choose a secure credit card. Refresh Secured Card is one option to consider as it comes with a low deposit of just $200 and an annual fee of $48. All payments are reported to the major credit bureaus to help customers improve their score provided that they make timely payments. The Home Trust Secured Visa is another card for persons with poor and bad credit, and the best part is that they don’t have minimum income requirements. It works just like a regular card, with payments reported to both TransUnion and Equifax. Customers are free to choose between low interest or no annual fee and a limit of up to $10,000.

Low Interest

If you only pay the minimum and want to save on interest charges, then choosing a low interest card is a smart move. MBNA True Line comes with the lowest rate by far – just 8.99 percent on access cheques, balance transfers, and regular purchases. Not only this, but MBNA offers trip assistance, emergency services, car rental discounts, and zero interest rate on balance transfers that are made during the first 10 months. Desjardins Modulo Visa also comes with a low rate of 10.9 percent, rewards scheme, travel insurance, and insurance for tablets, smartphones, and mobile phones. All purchases earn 1 percent, and rewards can be redeemed for travel, show tickets, and gift cards and rewards such as small and major appliances, pet accessories, robotics, drones, and toys, and more. Points can also be exchanged for savings products, insurance, service fees, TFSA, RESP, and RRSP, and other financial products.

Students

If you are enrolled in college or university, then applying for a student credit card is a smart move. This is a good way to build your credit history provided that you make regular payments. Some issuers also offer cash back and rewards that help cover food, textbooks, and bills. A good starter card would be the Scotiabank Scene Visa as it comes with no annual fee, discounts on car rentals, and supplementary cards. The best part is that customers earn 5 bonus points per dollar spent at Cineplex.com and Cineplex theatres. The Scotiabank Scene Visa won the CreditcardGenius People’s Choice award in 2020 and is ideal for students with no credit history.

Balance Transfers

This is a good choice for borrowers with high interest credit cards so that they benefit from low promotional rates. Some issuers also offer to wave fees on balance transfers and feature cashback and rewards schemes. Others offer products with low introductory and standard purchase rates, the BMO® Preferred Rate MasterCard® being one example. Customers benefit from a low introductory rate of 3.99 percent and a standard rate of just 12.99 percent on purchases and cash advances. Users who have a Performance Plan with their checking account are also offered a $20 annual fee rebate. Another card with low intro and standard rates is the MBNA True Line® Gold Mastercard, featuring a zero balance transfer rate over a period of 6 months. The standard purchase rate is just 8.99 percent. Up to 9 users can be added free of charge. MBNA also offers emergency services, trip assistance, and Budget and Avis car rental discounts. Some balance transfer cards also offer money back, rewards points, insurance coverage, and other incentives. The Tangerine World Mastercard® comes with a low promotional rate of 1.95 percent, mobile device insurance, and 2 percent money back. Customers can choose 2 categories to get money back, and featured categories include public transportation and parking, entertainment, recurring bill payments, restaurants, and furniture.

Business Owners

If you run a business, you may want to get a business card to build credit for your company. The main benefits for customers include simple expense management, larger credit limits, and control over employee spending. The choice of a card depends on whether you travel often, wish to save on interest charges or annual fees, or are looking for a comprehensive insurance package. The card that offers the largest welcome bonus by far is the Marriott Bonvoy Business American Express® Card. Holders are offered 50,000 welcome rewards points worth 3 hotel nights and 3 points per dollar on travel, dining, and gas purchases. Points can be redeemed toward nights at luxury hotels such as Westin, Sheraton, Four Points, and The Luxury Collection. Holders can also redeem points for pro golf clinics, backstage concert passes, meet and greets with famous athletes and artists, and airfare. Another card that offers a generous welcome bonus of 42,000 rewards points is the American Express Business Edge Card. Customers earn 3X points on business-related purchases such as gas, rides, electronics, and office supplies. The fact that American Express offers comprehensive purchase, travel, and business insurance is an added benefit. The coverage includes a buyer’s assistance protection plan, car rental damage and theft insurance, and employee card misuse protection. Added incentives for members are special experiences and offers and front of the line e-updates, reserved tickets, and advance access.

Best Rewards Credit Cards in Canada for 2020

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Rewards credit cards offer frequent flyer points and merchandise discounts to encourage frequent use. By maximizing points, users benefit from affordable airfare, hotel room benefits, and exclusive dining and shopping experiences.

Overview of Rewards Credit Cards

Customers who use rewards cards are offered miles or points for each purchase they charge to the card. Points can be redeemed for hotel or motel stays, free flights, entertainment, brand and select product purchases, and gift cards and vouchers.  Points can also be exchanged for specialized services, charity donations, classes and training, and recurring bill payments. Some banks feature a catalogue with a range of products to choose from, including movie tickets, spa and wellness, travel merchandise, accessories, and clothing. Sign-up bonuses are also offered to encourage spending.

Best Rewards Cards Overall

The best cards offer customers the choice to exchange points or miles for a number of options. These include catalogue merchandise, discounts on hotel bookings, cruises, and vacation packages, and statement credits. Cardholders also benefit from transferable points that can be transferred to hotel loyalty programs, airlines, and other partners.

Scotiabank Gold American Express® Card

One of the top cards to earn extra points is the Scotiabank Gold American Express® Card, featuring access to exclusive events and special offers, supplementary cards, and comprehensive insurance coverage. Holders earn 1 point for each dollar spent on daily purchases, 3x points on select streaming services, transit, and gas, and 5x points on dining, groceries, and entertainment. Extra points are offered for theatre and movie tickets, food subscription and delivery, fast food, and restaurant purchases. The card also comes with comprehensive insurance package, including travel accident, lost and delayed baggage, and flight delay insurance. The first $1,000 spent on everyday purchases earn 20,000 points. Added perks include no foreign transaction fees, front of the line tickets, and airport lounge access.

Eligibility criteria:

  • Minimum personal income required: $12,000
  • Interest Rate: 19.99%
  • Have not filed for bankruptcy: 7 years
  • Annual fee: $120

Apply Now

Best No Fee Rewards Card

No fee cards are great in that they combine two perks – no annual fees and frequent flyer or rewards points. This helps customers save on fees while earning money in the form of points. Common benefits also include travel and return protection, complimentary memberships, travel assistance services, and low introductory interest rates.

Tangerine Money-Back Credit Card

A great card to save on annual fees, the Tangerine Money-Back Credit Card also features unlimited money-back rewards that are paid on a monthly basis. Customers earn unlimited rewards and can either redeem them into their savings accounts or add them to their card balance. Holders earn 2 percent cash back across different categories such as entertainment, home improvement, drug store purchases, and parking and public transportation. While everyday purchases earn 0.5 cash back, recurring bill payments and gas, restaurant, and furniture purchases earn 2 percent money back. Additional perks include free supplementary cards, promotional balance transfer rate.

Eligibility criteria:

  • Annual income: $12,000 or higher
  • Interest Rate: 19.95%
  • Have not declared bankruptcy: 7 years
  • Annual fee: none

Apply Now

Best Cashback Card

Cashback cards offer money back on everyday spending and feature shopping perks, entertainment benefits, and sign-up bonuses. The main types are rotating bonus category, tiered cashback, and flat-rate cashback. Rotating bonus category cards offer extra rewards for spending in select categories that change quarterly. Examples of bonus categories include dining, groceries, and gas. Keeping track of the cashback calendar helps maximize rewards.

Scotia Momentum® Visa Infinite

This Scotiabank rewards credit card with extra cash back, the Scotia Momentum® Visa Infinite has the most awards in 2019. Customers earn 1 percent back on daily purchases, 2 percent on transit and gas, and 4 percent on subscription services, recurring bill payments, and grocery store purchases. Two percent back is offered on rideshare, trains, taxis, and buses. Customers earn 4 percent back on subscription payments such as lifestyle boxes, music and video streaming, and meal kit delivery. They also earn 4 percent back on bill payments such as gym memberships, utility bills, and insurance premiums. Supplementary cards are also available.

Added benefits include hotel room upgrades, guaranteed best available rates, complimentary concierge service, and car rental discounts. The card also comes with comprehensive insurance coverage, including flight delay, travel emergency and new mobile device insurance.

Eligibility criteria:

  • Household income: $100,000 or higher
  • Annual income: $60,000 or higher
  • Interest Rate: 20.99%
  • Annual fee: $120

Apply Now

Best Travel Rewards Card

The best cards that come with rewards allow holders to redeem points for travel, shopping, and cash and often feature rotating cashback categories. Added incentives include extra points, annual travel credit, sign-up bonuses, and no earning caps or redemption limitations.

Scotiabank Passport™ Visa Infinite* Card

As one of the best rewards credit cards to earn bonus points, the Scotiabank Passport™ Visa Infinite* Card offers generous complimentary bonuses. Customers earn 10,000 rewards points when they spend $40,000 or more on an annual basis. Cardholders earn double points for entertainment, dining, grocery purchases, and daily transit. Transit purchases include taxis, subways, and buses. There is an option to add supplementary cards to maximize rewards. Added benefits for users include airport lounge access, no foreign transaction fees, and Avis Preferred Plus Membership. The card also comes with comprehensive insurance package, featuring travel accident, flight delay, travel emergency medical, and other types of insurance.

Eligibility criteria:

  • Annual fee: $139
  • Minimum personal income: $60,000
  • Minimum household income: $100,000
  • Interest Rate: 19.99%
  • Have not declared bankruptcy: 7 years

Best Store Card

A store card is a good choice for customers with little or no credit exposure and those who need to rebuild their credit history. This enables borrowers to access more affordable credit solutions. Store cards come with additional benefits such as free shipping, discounts at stores, cafes, and restaurants, and free item returns.

PC Financial World Elite MasterCard

The PC Financial World Elite MasterCard is one such store card that comes with no annual fee and features standard and optional benefits. Customers earn 45 points per $1 when shopping at Shoppers Drug Mart and 30 points at PC Travel, Esso, and Mobil. All other purchases earn 10 points per $1. PC Financial also offers an easy to use rewards calculator to help cardholders calculate points across different categories. Spending categories include groceries, travel, gas, and health expenses. Holders who spend $500 on travel, for example, earn 180,000 PC Optimum points worth $180. Optional extras that come with this card include victim assistance, credit education, and daily surveillance and monitoring. Customers are also offered concierge service, identity theft assistance, travel emergency medical insurance, and more.

Eligibility criteria:

  • Minimum household income: $150,000
  • Minimum personal income: $80,000
  • Interest Rate: 19.97%
  • Annual fee: None

Best Card for Groceries

Grocery credit cards offer generous cash back on grocery store purchases and are thus ideal for big and frequent shoppers. Many cards also feature cash back on gas purchases, utility bills, and other expenses. Some cards come with rotating categories while others offer multiple rewards rates or flat rates. Co-branded cards are also available as to allow customers to earn extra points or cash back at select stores.

Triangle World Elite MasterCard by Canadian Tire

One of the best cards offering rewards, the Triangle World Elite MasterCard by Canadian Tire offers customers access to personalized offers and member-only events. Holders earn 4 percent back at participating retailers, including SportChek, Hockey Experts, Sports Rousseau, Atmosphere, and Canadian Tire. Spend and collect bonuses are also available at select retailers such as L’Entrepôt du Hockey, Sports Rousseau, Canadian Tire, and others. Cardholders also earn 7 cents per litre in CT Money at Husky and Canadian Tire Gas+. In addition, they are offered perks and incentives such as no interest financing, concierge service, and roadside assistance. The Triangle App helps cardholders to organize their finances and keep track of purchases and weekly exclusive offers. The card also comes with car rental loss damage/collision waiver and priority queuing.

Eligibility criteria:

  • Minimum income: $80,000
  • Annual Fee: None
  • Interest Rate: 19.99%

The best rewards credit cards offer multiple benefits such as points and cash, annual fee waivers, comprehensive insurance, and access to exclusive events and loyalty programs. Customers also benefit from one-time bonuses, unlimited cashback or points on grocery store, dining, and other purchases, and VIP status. Bonus points are also offered after the card member anniversary. The best cards with rewards also come with no category restrictions, seat restrictions, and blackout dates when promotions or discounts are no longer available.

Most issuers have minimum income requirements to ensure that customers have sufficient income to make regular payments. Persons with higher incomes are also more likely to be big shoppers who regularly charge purchases on points cards.

How to Use Credit Cards Smart

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Credit cards have benefits and drawbacks and knowing them is the key to staying away from debt and making better money choices. While drawbacks include high interest rates and card debt, there are also multiple benefits such as earning cash back and rewards points, easier budgeting, and more.

Drawbacks

Getting in Debt

Some people view credit cards as free money which can be dangerous, especially when combined with overspending and making frivolous purchases. Borrowing large amounts without repaying them can easily land you in serious debt. This, on the other hand, will ruin your score and make it more difficult to borrow in the future.

High Interest Rates

Some cards carry high interest rates and not paying the balance in full can be a recipe for financial disaster. You will incur a lot of debt if you tend to spend more than what you can afford to pay. Some store cards also have high rates of over 30 percent and low limits and are best to be avoided.

Benefits

Using Secured Credit Cards to Rebuild Credit

Secured credit cards help people with tarnished scores to rebuild credit and access a wide array of borrowing tools with beneficial terms. Cards such as the Refresh Financial Secured Card, for example, feature easy approval regardless of your credit score and affordable interest rates to rebuild your history. This is provided that you spend responsibly and pay off the full balance.Refresh Secured CardApply Now

Being Able to Rent a Car/Hotel

Another benefit for cardholders is that they can rent a car or book hotel accommodation. Some cards allow users to earn points that can be redeemed for hotel stays and room upgrades. It is also easier to rent a car or book a hotel with a credit card because having one shows that a bank or another entity has already trusted you with credit.

Car Insurance

Using a card that comes with rental car insurance means that you don’t have to buy additional coverage. This means that you save money and time as you don’t have to deal with insurers and check their policies and terms. Some cards go with rental car collision loss/damage insurance, one example being Scotiabank Platinum American Express. Users are automatically insured in case of car theft or damage. Cardholders are covered up to the cost of the rental, except for cars over $65,000.Scotiabank Platinum American ExpressApply Now

Travel Insurance

Some cards also feature travel perks such as travel insurance for flight cancellations and delays and hotel expenses. Issuers offer different types of policies such as emergency medical transportation, travel accident protection, change fee coverage, and trip cancellation. Scotiabank Platinum American Express, for example, offers comprehensive travel coverage, including travel accident, delayed and lost baggage, trip cancellation, hotel/motel burglary, and more.

Earn Rewards Points

Many Canadian banks run rewards programs that allow users to collect points and redeem points for purchases, events and concerts, flights, and statement credit. Rewards points can also be redeemed for food and drinks, hotel stays, trips, and subscription services. Canadian banks also offer cards with flexible redemption options, for example, the Scotiabank Rewards® Visa Card. Users are offered two options – points plus pay or points only. Rewards points can be redeemed for travel, merchandise, prepaid cards, and gift cards. Users also enjoy exclusive benefits such as cruise shore excursions, cruise upgrades, shipboard credit, hotel and vacation package discounts, and car rental discounts.Scotiabank Rewards Visa Card

Earn Cashback

There are also cards that allow users to earn cash back on purchases, including groceries, dining and entertainment, gas, and more. Many cashback cards feature added benefits such as welcome bonuses, low introductory interest rates, no annual fee, and no spending caps. The Scotia Momentum® Visa Infinite Card and Tangerine Money-Back Credit Card are two options to earn money back. The Scotia Momentum® Visa Infinite Card offers 4 percent back for every dollar spent on subscription purchases, recurring payments, and groceries, including supermarket purchases, gym memberships, utility bills, and insurance premiums.
Subscription services include things like lifestyle boxes, meal kit delivery, and music and video streaming.*Limited time offer – Earn 10% cash back on all purchases for the first 3 months (up to $2,000 in total purchases). Plus, no annual fee in the first year, including on supplementary cards. A welcome offer value of $350*. Offer ends November 1, 2020.Scotia Momentum Visa Infinite CardApply NowThe Tangerine Money-Back Credit Card offers 2 percent back on purchases in multiple categories, including parking and public transportation, entertainment, home improvement, and drug store purchases. Users also earn money back on gas, hotel and motel stays, dining, furniture, and grocery purchases. Cardholders benefit from perks such as no annual fee, no limits, and automatic earning.Tangerine Money-Back Credit CardApply Now

Budget Easier

Some credit cards also offer breakdown of spending by category which makes budgeting easier. It is easy to track and monitor spending by category, including restaurants, gas stations, and supermarkets. Other categories may not be included, for example, pending transactions, cash advances, balance transfers, and returns. Some issuers also offer advanced features such as the option to browse by merchant category, amount, date, and merchant name. There are spending trackers that enable users to access their credit and debit accounts and choose from different spend categories such as education, dining, donations, cash, business, etc. Users can check their account balance, pending balance, and available funds, set savings goals, and make secure payments.

Start a Business with a Credit Card

Starting a business with a credit card is also an option because many issuers offer cards with high limits. The money can be used to cover startup costs and operating expenses such as salaries, insurance, office supplies and equipment, rent, and taxes. Using a business credit card is also a good way to build business credit and benefit from better terms in the future. The type of card to choose depends on the business that you plan to start and the expenses you are likely to incur. If gas money is your biggest expense, for example, then you may check business cards that offer cash back for gas purchases.Scotia Momentum for Business VISASome cards offer both cash back and insurance perks, for example, the Scotia Momentum® for Business VISA. Scotiabank also features discounts on business purchases, a long grace period of 25 days, and supplementary cards. Businesses are offered comprehensive insurance coverage, including rental car collision loss damage and travel emergency medical insurance.

Have Low Conversion Fees between USD/CAD

This is yet another benefit for cardholders who frequently travel or make purchases in US dollars. Many cards charge foreign transaction fees of 2.5 – 3 percent for purchases made outside of Canada. Some cards, however, feature no US dollar foreign currency conversion fees to help save money on purchases in US dollars.

U.S.Dollar Credit Cards in Canada

As said, these cards help avoid conversion fees and come with added perks such as cash back, rewards points, and insurance coverage. The Scotiabank ® U.S. Dollar VISA Card is one option in Canada, featuring additional benefits such as instant cash advances, free supplementary cards, and car rental discounts.Scotiabank U.S. Dollar VISA Card

Low Interest Credit Cards for Longer Term Borrowing

Low interest credit cards help save on interest charges and are a good choice for users who find it difficult to pay off the balance in full. Low interest cards can be used for everyday purchases such as car rentals, travel, event tickets, electronics, phone bill payments, online purchases, and others. They can also be used for large purchases that have to be spread out as the interest charges will be lower than that of standard cards.

Credit Cards for Students

Many Canadian issuers also offer cards to students who usually have limited or no credit exposure. In addition to the chance to establish good credit, there are incentives such as money back, rewards points, and no annual fee. The Scotiabank Scene® Visa Card is one option for students who wish to earn rewards points and have no annual fee. Cardholders earn points for purchases at Cineplex.com and Cineplex theatres and for regular purchases. There are added benefits such as free supplementary cards, car rental and restaurant discounts, and credit card protection. Scotiabank Scene Visa CardApply Now

Using Credit Cards Smart

To save on interest charges, it is important to pay the balance in full each month. In some cases, as with large purchases, it is not possible to pay off the balance but it is a good idea to keep it as low as possible. Carrying a balance of over 30 percent is not only costly but may affect your credit score. If you borrow long term, then it is best to use a low interest credit card to save on interest charges that add up. This is also a way to keep debt from piling up. Lastly, borrowing on a credit card makes sense when you plan to start a new business or another productive venture that will earn profits and help repay your debt.

Using a credit card smart is also making you more financially disciplined. On the other hand, carrying large balances means that you spend more than you can afford. This is a red flag for financial institutions and may affect your credit score, especially if your credit utilization is high.

Cashback vs. Rewards Credit Cards – What is the Better Choice?

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Cash back and rewards cards are often reserved for creditworthy clients with high income and offer exclusive perks and discounts. The question whether a cash back or rewards card is a better choice depends on many factors, including financial habits and lifestyle, personality, short- and long-term goals, and credit history. Customers who are frequent travelers often opt for a rewards credit card. Some people also choose a rewards card to get merchandise rewards or services. Most cash back cards offer 1 percent back but there are attractive options. Look for cards that feature extra points on a selection of categories you will actually use.

LOC30

Cash Back Credit Cards

Benefits

Cash back cards offer plenty of benefits and perks such as long interest-free periods, low introductory rates, and special promotions that allow holders to earn at a double or triple rate. Signature cash back cards offer premium benefits and exclusive payback schemes to creditworthy customers. Some issuers feature a high earn rate of 4 – 5 percent during the first 6 months to attract clients and encourage spending. It is a good idea to pay the balance in full, however, because there are cards with interest rates of 19 – 25 percent. Some cards go with higher rates or annual fees in exchange for perks such as no limit on cash back, no rotating categories, no annual fee, and others. Some issuers also emphasize the fact that points never expire and there is bonus cash back if you reach a certain spending level.
On the downside, some issuers have annual income requirements and usually offer better terms to clients with stellar credit. There are issuers that offer eligibility calculators online to help customers make the right choice based on factors such as annual income, current bank, and residential and employment status.

Features

Some cash back credit cards offer the option to transfer high interest balances and clients benefit from a zero introductory rate over the first 6 to 12 months. The standard rate usually varies between 12.9 and 24.9 percent and is based on income and credit rating. Issuers offer cards by Visa, MasterCard, and AMEX, and usually require good, very good, or excellent credit. Cash back is offered on purchases at different retailers and establishments such as coffee shops, movie theaters, retail stores, gas stations, and grocery stores.

How Does It Work?

In essence, cash back cards work like loyalty and rewards schemes. This means that customers are rewarded for charging purchases on their cards. Issuers feature different options, and there are programs that offer a flat rate on all purchases. Many issuers offer a rate of 1 percent, and cash back is paid in the form of statement credit or check. There are financial institutions that advertise extra cash back on certain categories. In any case, money back is usually calculated based on spending level. Once customers reach a certain level, they can request statement credit or order a check. Some programs are somehow complex in that financial institutions may not disclose which purchases earn at a flat rate and which categories earn at a tired rate.

Rewards Credit CardsLOC31

This is a type of a premium card with special perks and benefits, complimentary bonuses, and generous reward schemes. Airmiles and rewards cards usually required very good or stellar credit to qualify. Some financial institutions also have annual household income requirements. The goal is to deselect risky and unprofitable clients and move existing clients up-segment. In any case, it pays to check the credit requirements because some issuers accept only applicants with excellent credit while others are more lenient and offer specialty cards to customers with fair credit.

Benefits

There are plenty of benefits for holders, one being a degree of flexibility in how to use and redeem bonus points. Rewards are offered on all purchases, and customers earn extra points on certain dining, travel, and shopping categories. Financial institutions also emphasize the fact that premium cards offer a greater degree of control and freedom. То attract customers, retain existing clients, and encourage spending, finance companies and banks offer added incentives and benefits such as complimentary lounge access, access to sporting, concert, and exclusive events, complimentary benefits and upgrades at resorts and luxury hotels, and a lot more. Customers also benefit from a selection of platinum services such as shopping and dining advice, booking, travel planning, and assistance, and a lot more. Holders also benefit from priority boarding, discounts on in-flight refreshments and snacks, and flight upgrades. You can check your first bag free-of-charge as well.

Features

Specialty credit cards offer different types of rewards, including shopping rewards, discounts on gas, and points. Some cards go with zero introductory fees during the first 6 months or 1 year while others have no annual fee. There are also issuers that charge high annual fees in exchange for exclusive benefits and add-ons. The interest rate varies, based on income, credit rating, debt to income ratio, issuer, and other factors. Issuers usually offer a variable interest rate. Rewards can be earned on different types of purchases such as retail, gas, department store, and others. With airmiles cards, holders also collect points toward flight discounts and free flights. Some issuers offer points on standard purchases and extra points on flight and hotel bookings. With other issuers, clients earn 1 point on standard purchases and 2 points on utility, grocery store, and gas purchases.

How It Works

LOC32Rewards cards are popular among bank customers and offer access to attractive loyalty programs and schemes. Basically, cardholders earn points on all purchases charged to the card. The earn rate varies by issuer and purchase category. The points earned can be exchanged for travel and retail purchases or for cash rebates. Some providers also offer the option to redeem points for services. Basically, you can choose between cash and merchandise. Note that limitations and restrictions may apply and some types of purchases may be excluded. Customers are also offered bonus points for online bill payment.

Conclusion

The choice between cash back and rewards credit cards depends on many factors, among which spending habits, income level, lifestyle, and types of incentives and rewards and loyalty programs offered. There are other factors to look into, for example, the grace period, penalty rate, interest rate, balance transfer fee, annual fee, foreign transaction fee, and others. Some issuers also offer complementary and supplemental credit cards. The type of card to choose also depends on your spending level. Many customers use their card on a daily basis to get the most of the rewards or cash back scheme. The type of card to choose also depends on your credit rating. Creditworthiness is an important factor for financial institutions and they use it as an indicator to measure risk level. Customers with a solid payment history and on-time payments are offered premium cards with exclusive rewards and experiences. In fact, if you have fair credit, your application for a cash back or rewards credit card may be turned down. It pays to check your credit report for mistakes and omissions and improve your rating first and then apply for a specialty credit card.