Credit cards with rewards programs

Reward credit cards allow users to earn incentives for making purchases with their credit card. Points accumulate for each dollar charged on the card, and cardholders can redeem these points for various rewards. Reward cards usually require better-than-average credit for approval. There are seven major types (not including airline miles / frequent flier cards, which we'll discuss a bit later).

• Cash back credit cards 
  This type of credit card allows you to earn cash rewards for making purchases. The more the card is used, the more cash rewards you receive. Most cash back cards earn users around 1 percent of total purchases, excluding interest and finance charges. Some cards offer a higher cash back percentage with increased usage; others offer a higher cash back percentage at select merchants or for particular types of purchases. Since cash back programs are costly to credit card companies, some of these cards have an annual fee that can vary from $50 to $100. This type of card is best for people who are faithful about paying off their balances each month. If used appropriately, a cash back credit card can earn the cardholder a significant amount of money over time. Compare cash back credit cards.
• General reward points credit cards 
  Reward credit cards are similar to cash back cards in that cardholders can accumulate points toward a reward structure, which is based on how much the card is used over time. General reward cards offer cardholders a variety of items to cash points in for: gift cards, electronics, hotel stays, plane tickets, jewelry, pet supplies and more. Some rewards can be attained for 1,500 points; others cost 200,000 points. Reward programs and promotional offers often change; thoroughly review a card's terms and conditions before applying. 
  Some general reward credit cards come with an annual fee ranging from $50 to $100, although most have no annual fee. Reward cards are best for people who regularly pay off their balances each month. By minimizing their finance charges, individuals will reap greater benefits from the associated rewards credit card. Compare reward points credit cards.
• Hotel or travel points credit cards
  This is a genre of credit cards specific to hotels and travel. Some cards are co-branded with hotels, such as the Marriott Rewards Visa card, or the Hilton HHonors American Express card. These credit cards allow you to earn points for all purchases, in addition to bonus points for dollars spent on stays at the respective hotel chain. You can redeem your points for free nights and upgrades at the hotel chain your card is co-branded with. 
  Then there are broader hotel and travel cards such as the Bank of America's MilesEdge Visa, with which points can be redeemed for travel, theme park admission, stays at major hotel chains and more. Blue Sky from American Express is similar -- points can be applied toward plane tickets, hotel stays, rental car use or cruises. 
  Because these reward programs can be costly for credit card companies, many of these cards come with an annual fee. If you are not a frequent traveler, the annual fee may negate the benefit of the rewards earned. Compare hotel/travel points credit cards.
• Retail rewards credit cards
  These credit cards are co-branded with a major retailer, such as Disney, Amazon.com or Best Buy. Points are accumulated by making everyday purchases, though cardholders are awarded with double or triple points for making purchases from the co-branded retailer. Reward points must be redeemed for products or services from that specific retailer. With the Best Buy MasterCard, for example, you earn up to 2 percent back from any purchase with the card, and 4 percent back from Best Buy purchases. Cardholders receive the reward money in the form of reward certificates that can be used only at Best Buy. With the Disney Visa card, points accumulate for every purchase, and they can be redeemed for Disney products or vacations. Compare retail rewards credit cards.
• Gas cards with points or rebates
  Gas cards come in two species: general and brand-specific. General cards treat all gas companies equally, while brand-specific cards favor one gas company. The Discover Open Road card, a general gas rebate card, gives you 1 percent cash back for general purchases but rewards you with 5 percent back for buying gas or having auto maintenance done at any company. The BP Visa, in contrast, will give you a 1 or 2 percent rebate for regular purchases, but you will earn 5 percent rebate only when buying gas at BP stations.
  If you tend to be loyal to a certain gas company, a brand-specific card may benefit you, but if you tend to just stop at whichever station is closest, you may be best with a general gas rebate card. Additionally, it's important to remember that a gas company may be very popular in one state, but uncommon or nonexistent in other states, making brand-specific credit cards less than ideal for long road trips. For example, BP is a very common gas station in Florida, but there are few of them in Texas. Sinclair gas stations are in 21 states, but if you have a Sinclair MasterCard and are driving through California, you're out of luck.Compare gas cards.
• Automobile manufacturer rewards cards
  Auto rewards cards allow consumers to earn points that can be redeemed toward the purchase of a new or used car, auto-related expenses or merchandise. With the GM Flexible Earnings MasterCard, for example, cardholders can opt for cash back rewards, or apply their earnings toward the purchase of a new GM vehicle. This card is most beneficial to those looking to purchase a vehicle in the near future. Compare auto rewards cards.
• Home improvement rewards credit cards
  These credit cards allow consumers to earn reward points for all purchases, while earning extra points for home-related expenditures. For example, with the Citi Home Rebate MasterCard, you earn 1 percent back on regular purchases, but 6 percent back on purchases involving utilities, cable/satellite TV, Internet connection and telecom for the first year. 
  Rebates earned are automatically applied to your mortgage principal. Bank of America'sHome Advantage World MasterCard works the same way, though points can be redeemed for cash back, travel, gift cards, merchandise if you decide not to apply them to your mortgage. Compare home improvement rewards cards.