What Types of Credit Card Rewards Are There

Whether you’re applying for your first credit card or are well-versed in the area of credit card types, you may still have questions about reward credit cards and how they really work. Here is an overview of the most widely-used reward cards as well as the pros and cons of each type. It is important to remember, however, that all reward cards are not created equal, increasing the need to always read the fine print before applying for or using the card.

Types of Reward Credit Cards

Here is a list of some of the most common types of rewards credit cards. In all of these cards, the interest rates may vary by companies and your credit scores.

Cash back credit cards

These cards pay you cash back each time you use the credit card to make purchases. The amount may vary and may go up with increased use, but the amount of cash back you receive is generally at least one percent of the purchases amounts.


  • If you’re the type of consumer who pays the balance off each month, you can a substantial amount of cash if you use the card a lot.


  • They often have annual fees that can be anywhere from $50 or more.

General reward credit cards

These cards provide you with points that can accumulate and that increase as the frequency that you use the card is increased. Points can be used for gift cards, hotel stays, electronics, plane tickets and more.


  • Awards can really benefit you if you pay off the card each month.
  • Points can be used to purchase things you’d use anyway.


  • They may come with an annual fee.

Hotel or Travel Point Credit Cards

These are similar to general reward cards but give you points that can be used for hotels; these cards are usually connected with specific hotel brands. The points can be redeemed for free nights at hotels or upgrades to better hotel rooms.


  • They may also be used to get discounts on airfare and amusement parks, among other things.


  • They often have annual fees.
  • They may not be beneficial if you don’t travel a lot.

Retail rewards credit cards

These type of cards are generally associated or co-branded with a specific retailer. For most, you receive a certain number of points with each purchase you make, but also get bonus points when you make purchases from the retailer in which the card is co-branded such as Amazon.com.


  • You can get points that will save you money on things you’d buy anyways when you’re a frequent shopper at the company that the card is co-branded with.


  • You can only redeem the points at specific retailers.
  • The interest rates are generally higher on these cards.

Gas rewards credit cards

These cards may be brand-related or may be good at any station selling gas. They offer points that may be used at retailers or other gas stations. Let’s face it, we need gas, so we may as well get rewarded for it. They often give 1% for regular purchases but 5% or more for gas or auto repair purchases.


  • They can save you money at the pump.
  • The points can be redeemed for merchandise you may buy anyways, thus saving you money.
  • There is generally no annual fee.


  • They may allow you to only buy gas at certain stations, which may require traveling further than need be.
  • They’re often brand-specific and may not be usable at your closest or favorite gas station.
  • They may not be ideal if you travel to states that don’t have that specific gas station.

Best Way to Pick Your Rewards Credit Cards

When going through the various types of rewards credit cards available, choosing the card you want can be a daunting process. The best way to choose a rewards credit card is to evaluate how and where you spend your money. For instance, if you seldom travel, you won’t get many benefits from cards offering travel-related points. However, if you shop frequently at a certain retailer, you can save a lot of money by utilizing retail rewards credit cards.


Featured Image: DepositPhotos/ SLPhotography

Posted on May 5, 2023