Credit card companies had originally come up with the idea of a rewards program in which they give cardholders some benefits for making purchases using their credit card. But these programs are not that attractive anymore as benefits per dollar spent have fallen.
Moreover, credit cards have other problems like fees, high interest, and credit limits. The good news is credit cards are not the only way to earn rewards. You can consider other payment options that give you rewards for making purchases but do not come with the problems related to a credit card.
You can look for rewards from the stores that you visit frequently. Many retail stores offer cards that let you earn points every time you make a purchase from that store. These points can be redeemed for gifts and discounts once they reach a certain limit.
Most of these store cards are given free to customers who make frequent purchases or who purchase goods worth more than a certain amount. Stores often have promotional offers and special discounts for people who have store cards. Many stores offer up to 20% discount on the first purchase using that card. Other benefits include private sales, complimentary standard alteration and priority access to certain items.
Another great option is getting a debit card – something that is becoming increasingly popular among regular shoppers. Debit cards give points for every dollar spent through signature transactions.
It usually takes a lot of purchases to get any significant points on a debit card. Some debit cards offer better reward points but they require an annual fee. But this situation is changing now. Many debit card-issuing companies are attracting customers by giving huge bonus rewards to new customers. So when you are making a decision about which debit card to apply for, you should factor in the bonus you will get when you make your first signature purchase using the card.
No matter which alternative rewards system you choose, it is important to be careful. People often end up overspending in order to earn a lot of reward point. This could be very dangerous. In case of store cards, if you do not pay the entire amount every month, you will usually be charged a very high interest rate. Similarly, if you end up taking an overdraft on your checking account because of your debit card, you will be burdened with exorbitant fees.