Is cash discount the best reward for a credit card?

Credit card rewards come in all shapes and sizes. They include free airline tickets, priority booking for special events, free movie tickets, good food discounts and many more. However cash discount is probably the most popular for many people.

Most cardholders prefer to exchange their rewards for cash rather than replacing other free gifts available. Many financial experts also believe that cashback programs are in fact the most obvious credit card rewards than other rewards. The rewards system is simple, less expensive for a credit card company.

Cash discount programs have a wide range of ratings. It all depends on the type of credit card that consumers have. For example, there are dedicated bonuses for college students such as college savings. For retirees, they have retirement investment bonuses.

In the usual cashback program, the credit card company will return a small percentage of the total amount charged to the card to the cardholders. It can be as high as 5 percent of your purchases. The discount is usually reflected in the monthly card statement as a credit line. For example, a balance of one hundred dollars with a five percent discount would result in a final payment of ninety-five dollars.

Typically, the discount percentage is higher when purchases are made in popular categories such as gas stations, restaurants, clothing stores and airline tickets. A one percent discount appears to be the norm for most purchases. However, the discount rate varies with different credit cards and it makes sense to do some research before getting one.

Some may feel that cash discount is not as valuable as other rewards such as airline tickets. Although this may be true, high ticket items such as air tickets usually require a large amount of points. This usually translates into large expenses on your part and it may take a long time to accumulate the necessary points. In this aspect, the cash discount option is more attractive since there is no necessary reward point to receive the discount.

To appeal to a larger customer base, many credit card companies also include other rewards that can be redeemed for points as well as cash discount. This opens up a lot of options for cardholders where they can enjoy a discount and redeem other gifts with points.

Cash discount is the best reward for those who regularly make small purchases on their credit card. Long-term savings can be quite significant. For big spending, high ticket items such as airline tickets or good food may be more appealing to them.

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