What is a reward credit card?
There are different types of reward credit cards. You can earn rewards for travel, cash back and more. Each time you make a purchase with a rewards credit card (check with each card on purchase limitations) you can earn cash back, points or rewards for travel like miles or hotels. This can be a great option if you can be disciplined and pay down the balance of the credit card each month. Most rewards credit cards offer cash back options for utilizing the card for online shopping, dining and entertainment, grocery stores and gas stations, etc.
How do I redeem the rewards that I have earned using my credit card?
Cash rewards are typically redeemed into a checking or savings account with the financial institution that you bank with. It could also be a statement credit on your credit card account or given as a rewards card. It is always best to read the terms and conditions on whichever card you choose. Look for the options on how to redeem your rewards.
Can using a credit card help to rebuild my credit score?
Credit cards can be one of the easier ways to help build up your credit. If you use a credit card regularly and make regular on time payments, and never fully max out your credit card limit, this can be a great way to improve your credit score. The typical rule of thumb is to keep the balance on the card at a 10% utilization ratio. Example: If your credit card limit is $3,000, you should keep your balance at $300 or lower. Preferably you can be disciplined enough to pay it off each month after purchases.