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6 ways credit card rewards work for you

A wide menu of choices
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A wide menu of choices

Get ready to scoop up more rewards.

Credit card companies are jockeying for your business, so they're dishing out more and better rewards offers.

Their rewards programs let you rack up points every time you use your credit card. Cardholders can typically exchange their points for cash and/or use them to pay for travel or certain retail items and services, which are usually listed on the card's website.

Most people prefer cash-back rewards, which let you redeem your points for cash rather than for merchandise. And credit cards are dishing out more cash. Some cards pay out up to 5 percent of a set amount that you charge, though some purchases may be excluded, says Andrew Davidson, senior vice president at market research firm Mintel Comperemedia in Chicago.

But that's not all. You can increasingly choose innovative ways to receive your rewards points that can bolster your finances. You can pay your taxes, beef up your individual retirement account or opt for gift cards sweetened with discounts. Banks also are offering more loyalty programs, which reward consumers for adding services such as online bill payment.

Here's what the rewards landscape looks like in today's competitive rewards environment.




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Balance Transfer Cards 16.23% --0.00 16.23%
Cash Back Cards 16.48%  0.07 16.55%
Low Interest Cards 11.51%  0.08 11.59%
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