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Rewards credit card guide: holiday edition.

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See if one of these 3 rewards card categories is right for you.

With Black Friday, Cyber Monday and holiday travel right around the corner, now may be a great time to consider a rewards credit card. But just like finding that perfect gift or flight can be stressful, so can finding the right card.

Before you start spending, earning and redeeming, though, keep in mind rewards cards are usually best for those who pay their credit card bills every month, in full. That's because, if you carry a balance, the value of the rewards you'd earn by spending with the card is almost always less than the extra amount you'd have to pay to finance that spending. So be honest with yourself about how a rewards card might fit your financial situation.

Assuming you're a good candidate for a rewards card, here are 3 categories to help you sort out your options:

  1. Travel

    Travel rewards cards come in all shapes and sizes (actually, they come in that same rectangular shape and size all credit cards come in!). If you fly a specific airline or regularly stay at certain hotels, getting that company's card can be a good way to earn miles, points and perks.

    Like to travel, but don't have a preferred airline or hotel? That's okay because there are also bank-based credit cards with their own flexible travel rewards points, which can be transferred to airlines and hotels or used to offset travel expenses.

    Good for: frequent travelers/vacationers.

  2. Cash Back

    Cash back rewards cards offer just that: cash back on purchases made using the card. Usually, the way they work is you get a certain percentage of the money you've spent on the card back as a credit on your account. This type of card can be a nice way to get a little discount on what you spend every month.

    Good for: those who want a built-in break on their monthly bill.

  3. Store Card

    If you shop at certain businesses – department stores, big-box retailers, websites – they may have their own credit cards you can apply for. These cards typically offer perks and discounts exclusive to that specific business.

    Something to consider: at many stores, you get free access to perks, discounts and offers just by signing up for their loyalty program. Sometimes, though, the credit card can offer better rewards than you'd get just from a loyalty program.

    Good for: those who shop a lot at a specific store or stores.

Whether you’re shopping up a storm or trying to avoid one while traveling, certain types of credit cards can be very rewarding, not just during the holiday season, but also year-round!


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