Common Credit Card Incentives

• Credit card companies offer cardholders a number of incentives to get the cardholders to use their cards more frequently. The credit card companies come out on top when people use the cards so much that they have to carry a balance and pay interest on it, but people who spend wisely can benefit from credit card incentives.

Reward Points

• The most general type of credit card incentives are reward points that the cardholder accrues for every dollar spent and can redeem for one of many types of rewards. Potential rewards include airfare, electronics, hotel stays, cash back, gift cards and many miscellaneous items. General rewards cards offer cardholders flexibility in deciding how to spend their points.

Airline Miles

• Most major airlines have affiliated credit cards that allow cardholders to earn frequent flier miles with that specific airline for purchases on the credit card. These frequent flier miles can then be redeemed for domestic or international airfare tickets. People who fly frequently on a major airline benefit from miles, but people who use their credit cards lightly need to be careful to earn enough miles to redeem for a ticket before the miles expire.

Cash Back

• Cash is always a strong incentive for people because they can spend the cash on whatever they would like. In addition, cash back credit cards often allow cardholders to redeem their incentives sooner than if they had to accrue thousands of airline miles to redeem them for a ticket. Some cash back incentives have a set percentage of all the spending on the card refunded as cash back, where others choose specific categories of spending on which to offer cash back during different times of the year.

Promotional Interest Rates

• Credit card companies sometimes offer cardholders promotional interest rates much lower than the usual interest rate. This type of incentive is most common on a new credit card, which the company can advertise as having a very low interest rate or no interest for a certain number of months. These promotional interest rates often apply to balance transfers and sometimes to purchases as well. In addition, credit card companies sometimes offer promotional interest rates on balance transfers or cash advances to existing cardholders.