 TITLE: What Is a Rewards Credit Card? CONTENT: How Rewards Credit Cards Work\n-----------------------------\nIdeally, rewards are a win-win for you and the credit card issuer. The issuer wants you to get in the habit of pulling its card from your wallet before any other card (and maybe start using it for transactions where you might normally use a debit card). To encourage you to do so, the issuer provides you with incentive credits, which take a variety of forms:\n### Cash Back Credit Cards\nThe most popular rewards cards offer a rebate—typically a credit to your account at the end of the year—proportional to the number of purchases made with the card. The most common cash back amount is 1%—a penny back for every dollar you spend—but 1.5% cards are gaining popularity.\nIn addition, \"luxury rewards\" cards with high borrowing limits and offered to individuals with excellent credit scores, offer rebates as high as 2%. Some rewards cards offer rotating categories so you can earn more cash back on different things each quarter—such as groceries or gas.\n### Travel Credit Cards\nCards affiliated with airlines or hotels can award anywhere from one to two flight miles for every dollar spent (1.25 miles-per-dollar and 1.5 miles per dollar are increasingly common). Awards may be higher when the card is used to purchase airline tickets—with the card's affiliated airline and, sometimes, even with other carriers. Mileage cards are very popular with business travelers, who use their cards to book reimbursable work trips, and then keep bonus miles for personal use.\nSome cards require bonus miles to be redeemed only with the affiliated airline; others let you fly with any carrier. Redemption of bonus miles may be subject to blackout dates or other exceptions, as detailed in the cardholder agreement. One example of a travel card is the Delta SkyMiles® Gold American Express Card.\n### Credit Cards With Points\nSometimes referred to as using terms such as \"bonus dollars,\" these are calculated the same way as cash-back rewards and bonus miles—typically a point for each dollar spent on the card—but they must be redeemed for items or services from a catalog specific to that card. Points customarily accumulate in real time—you don't have to wait until the end of the year to collect or use them—but they also may have expiration dates before which you must use them or lose them.\nDepending on the card, points may be redeemed for gift items, merchandise at affiliated retailer(s), stays at hotels, theme parks, or resort properties, or magazine subscriptions (a classic way to \"burn off\" leftover points before they expire). END