How Credit Reward Perks Work

Credit card rewards programs are designed to give you extra value for your daily spending. These perks work by converting your everyday expenses into points, cash back and travel benefits. The Credit Reward Perks website are funded by interchange fees paid by merchants and annual fee payments from card issuers.

What does credit reward redemption mean?

Some credit cards offer a flat rate of reward points across all categories of spending, while others have tiered earning structures with bonus rates for specific categories of spend. For example, some cards earn 3 points per dollar on entertainment and streaming services while other purchases get just 1 point per dollar. Some cards even have rotating bonus categories, which change each quarter from things like grocery and drugstore spending to ecommerce retailers.

When you redeem points, the card issuer typically deposits the cash value directly to your account balance as a statement credit. Some cards also allow you to trade your points for merchandise, or use them to book travel. Card issuers may also give you the option to transfer your points to partner loyalty programs, which can help you get more value for your redemptions.

Some cards also have a special sign-up bonus that gives you a large number of points at once. However, you must meet the spending minimum and keep using the card to qualify for this bonus. Also, remember that overspending in pursuit of racking up miles or points can cancel out the monetary benefit by causing you to carry a balance and incur interest charges.

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