Chris Mettler, Founder and President of the credit card resource website CompareCards.com, once stayed in a hotel with his wife on their anniversary free of charge, thanks to his travel rewards card.

“My rewards card had no blackout dates for airline flights or hotel stays, so we were able to book the hotel of our choice in Savannah, Georgia, without worrying about award availability,” Mettler says. “We got a $260 per night hotel completely free.”

There are numerous types of rewards credit cards available, giving consumers the opportunity to earn perks such as free hotel stays. It is difficult to put rewards programs into categories because the cards come in so many different forms, Mettler says. However, there are a few general, popular types of cards out there: cash-back, travel rewards and points-earning cards.

Each type has its benefits and drawbacks, so before you apply for a rewards card, it is important to understand the terms of the different deals available. Think about which type of card best fits your lifestyle and spending habits, and then be sure to consider how your credit scores and credit reports will affect your options.

Cash-back rewards cards
Cash-back cards are one popular type of rewards card. “As the name implies, cash-back cardholders accumulate rewards on every purchase that can essentially be redeemed for cash,” Mettler explains.

Although the amount varies, these types of cards typically offer 1 to 5 percent cash back. Some will have a flat percentage for all purchases, while others will let you earn extra rewards for purchases in certain categories (for example, gas or groceries), he says.

In order to find the best cash-back deal, consider your spending patterns, advises Alex Gerard, Founder, CEO and Editor of the credit card information site Cardsmix.com. “The best offers are around 2 percent flat cash back on all purchases, or 1 percent flat cash back plus 3 to 5 percent or higher cash back on certain spending categories,” he says.

Some of the pros of cash-back rewards cards include potential sign-up bonuses, and many come without annual fees, according to the May 2015 report from the for-profit educational organization CardRatings.com, “Which rewards program is best – credit card points, miles or cash back?” Cash-back rewards programs are also among the most flexible because you can use the cash you earn in any way that you like.

However, it is common for cards to set an annual limit on cash back for bonus categories, and you could lose your accumulated rewards if you do not make payments on time or redeem your rewards fast enough, the report states.

Overall, cash-back cards are best for “consumers who want a simple rewards program and don’t want to jump through any hoops,” Mettler says. However, he adds that these types of cards are not the best choice if you are looking to get the “absolute best value.”

“Travel rewards credit cards may be a little more complicated than cash-back cards, but in terms of value, they can often get you a greater return on your spending,” he explains.

Travel cards
There are different kinds of travel rewards cards, according to Mettler, and co-branded cards offer rewards with one specific hotel or airline. “These cards can be very good if you are a loyal customer of that particular brand, but their downfall is that you are very limited in how you can redeem your rewards,” he says.

On the plus side, points-earning travel cards give you more flexibility. After accruing enough points, you might be able to receive gift cards or apply your points to frequent flier accounts.

“While these types of credit cards will generally give you the highest value rewards on the market, the downside is that the intricacies of the programs are not always crystal clear; it will require a little research to truly receive the best return,” Mettler states.

Additionally, you give up other benefits in exchange for the flexibility of points-earning cards. “You lose airline-specific perks, like priority boarding or free cabin luggage,” he states.

Travel cards typically appeal to people who fly and stay in hotels frequently (for example, business travelers), according to the CardRatings.com report. However, they also come with some potential drawbacks, such as high annual fees and blackout dates that stop you from redeeming miles or hotel stays around holidays.

And, naturally, “all travel rewards cards will be useless to consumers who have no interest in traveling,” Mettler says.

Reward points
Some rewards cards operate like a hybrid of travel and cash-back cards, offering one or more points for every dollar you charge, according to CardRatings.com. You can then exchange the points for merchandise, gift cards or plane tickets.

“Reward points credit cards offer the flexibility to exchange your points for cash, travel or purchases, thus giving you maximum flexibility in a way to redeem your reward,” Gerard explains.

Another advantage of these cards is that they might give you discounts on gift cards or other purchases, increasing the value you get from the points you accrue. However, CardRatings.com cautions that it can be difficult to understand exactly what your points are worth. Furthermore, if you miss payments or wait too long to redeem your points, you could lose your rewards.

Choosing the right card
When deciding which type of rewards card to get, it is important to focus on finding one that fits your individual needs and habits, according to Kim Cole, Education Outreach Coordinator for the Manalapan, New Jersey-based Navicore Solutions.

“In general, the pros of these particular cards is that if they meet your lifestyle, then they can be a benefit,” she says. “You’re getting something back on the investment of using that particular card.”

If you shop at a specific store frequently, she recommends considering getting a card from that outlet. Of course, it is not worth getting cards for places where you rarely shop.

“If it’s a gas station you wouldn’t normally use because their gas is 75 cents higher than the other place, don’t get the rewards card there,” she advises. “It’s not going to be a benefit to you.”

Additionally, if you carry a credit card balance, the interest on a rewards card could outweigh the rewards, she adds. “If you don’t use the card wisely, it will definitely outweigh any benefit the credit card is offering to you.”

You will also probably need good credit to qualify for the best deals. “Getting the card would be a process, which would include a credit review, just like any other card or loan,” says Dennis Johnson, a certified credit counselor with Atlanta, Georgia-based ClearPoint Credit Counseling Solutions.

Because your credit scores and credit reports influence lenders’ decisions to let you – or not let you – borrow money, it is a good idea to review your credit reports to ensure they are accurate and up to date.

Although having less-than-stellar credit does not necessarily mean you will not be able to get a rewards card, having good credit will open the door to better deals.

“There are a number of rewards cards that are available for consumers who only have fair or good credit, but in order to get approved for the best offers and the most rewarding cards, you’ll need an excellent credit score,” Mettler says. “Simply put, the higher your credit score is, the more options you’ll have for rewards cards and the better those options will be.”

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