Dining credit cards actually refer to reward credit cards that reward the cardholder for making food purchases. Rewards credit cards, especially cash back cards, let the cardholder earn point, cash, or items for shopping at grocery stores and eating out at restaurants.
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You can also compare the opinions of other people with these types of cards at JD Power and the professional reputation of the credit card provider at the Better Business Bureau. Once you know you trust the lender, then deciding which card best meets your lifestyle is the next step.
What is the difference between a rewards credit card and a cash back credit card?
Technically a cash back credit card is a type of rewards card. With a rewards card the cardholder earns a certain number of rewards points for every purchase they make. Certain purchases may earn the cardholder more points than others may.
Once the cardholder has a certain number of points, they can redeem them for special rewards.
These rewards can include gift cards, merchandise, and travel rewards. The most common rewards credit cards are frequent flier miles cards. These traveler-preferred cards let the cardholder earn plane tickets and upgrades by just making everyday purchases.
A cash back credit card typically uses a percentage system instead of a points system. This card allows the cardholder to earn a certain percentage of their transaction amount back. These cards are more popular with people that would rather have more cash on hand rather than rewards they do not really need or cannot use right away.
How do I receive my rewards?
With regular rewards credit cards the cardholder would have to wait until they have enough points saved up for the reward they want. After the points have been saved, they would have to log into their credit card account online or their account with the rewards program associated with that card. The process works much like any other online shopping experience with a list of rewards and how many points that reward costs. The cardholder chooses their reward and the points are deducted from their points balance.
For cardholders cashing in frequent flier miles or other travel rewards they will most likely have to call the card provider on the phone to make arrangements. When it comes to dining rewards, these cards often have restaurant gift cards as a rewards option.
A cash back credit card might be a better choice for someone that has no interest in these other types of rewards and just wants more cash to apply to their monthly food costs. The amount of cash back the cardholder has earned is kept track of through their online credit card account and once a minimum amount has been reached, they will be issued a refund, most likely in the form of a credit to their account.
Some lucky cardholders receive their refunds as a check through the mail, but many providers prefer to just refund the money to the credit card.
The reason providers like this method so much more is because it encourages the cardholder to use their credit card more.
What type of terms should I expect with a cash back credit card?
The terms for any type of credit card will vary depending on the card provider and the credit score of the cardholder. Chase offers a very popular cash back credit card called the Chase Freedom card. This cash back card lets the cardholder earn one percent cash back on all purchases and 5% back on certain purchases each quarter. The types of transactions that earn 5% back will change each quarter.
Like many credit cards on the market today, the Chase Freedom card has a special introductory zero percent purchase interest rate for the first few months the account is open. This special rate also applies to balance transfer, which means the cardholder could save a lot of money by transferring the balance from a card with a high interest rate to the new card and paying it off before the zero interest offer expires.
The cardholder should be aware that this credit card, like many cash back credit cards, has a penalty interest rate. This means that if the cardholder is late with a payment or goes over their credit limit their interest rate will increase significantly, in this case 29.99%, even if the special introductory rate has not expired.
Make sure you always take the time to find the best rewards credit cards, and compare which providers work for you!