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Rewards Programs Are Getting Tighter With Their Payouts

It would seem that we are now seeing yet another effect of the current credit crisis in America. Credit card issuers are becoming ever more stingy when it comes to paying out on their rewards programs.

There is a great deal of pressure on card issuers to reduce costs and one way to do so is to curtail what they pay out on rewards. The most effective way to do that is by increasing the number of points needed to redeem for rewards.

It is now estimated that upwards of 45% of all credit cards in the United States offer some sort of rewards program. These rewards are used by the credit card industry to promote and encourage the use of their cards.

The most sought after rewards cards are known as cash back or cash rebate cards. Travel reward cards are popular with businesses. Gas rebate credit cards were quite popular a few months back when a gallon of gas cost in excess of $4.

Surprisingly enough it is estimated that 20% – 25% of debit cards offer a rewards bonus program in one form or another. That just goes to show you how effective they are in enticing cardholders to use their cards.

Be careful though because there is a trade-off. If you carry a balance then you are more than likely paying more for your rewards card in the form of fees and interest rates. There is a cost for everything and if the credit card companies can find a way to pass those on to the consumer they will in a heartbeat.

As always, be sure to carefully read the fine print in the disclosure statement. That is traditionally where credit card issuers hide the information they don’t want you to see. What we’re talking about here is how APR (Annual Percentage Rate) and fees are assessed.

Related Information:

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