A growing trend in the credit card rewards programs is the popularity of vouchers as rewards. Some instant approval credit cards offer rewards programs and some do not.
Rewards programs offer points per dollar of spending on a particular credit card. Once enough points have been accumulated these can then be redeemed into rewards of choice as offered by the rewards program. Voucher based rewards schemes instead of giving rewards points that can be spent on a variety of rewards, give vouchers that can only be spent on one store or service provider.
Unlike a points based rewards system they are not dependent on a card user choosing the reward and then having the reward sent but are usually sent automatically when the points reach a certain threshold. This may suit many consumers as recent studies in the UK showed that while rewards credit cards are increasing in popularity claiming of rewards is not. Withonly 30% of rewards card holders actually redeeming points for rewards.
Another option that many credit card rewards programs are incorporating into their rewards schemes are gift vouchers. Under these systems, rewards are accumulated per dollar spent as usual and once an amount has been accumulated points may be redeemed for gift vouchers for certain stores.
Most voucher based systems are with store cards. These vouchers are given as a certain proportion of the spending on the card. The vouchers tend to only be able to be used at the store. The rewards system may reward spending at the store with an increased amount of points for the vouchers.
The vouchers tend to be transferable, that is they do not need to be spent by the person who has been sent the voucher. There advantages of this type of rewards system and these include:
- Rewards tend to be more generous than more open rewards systems.
- Vouchers are sent automatically when a certain amount of points have been built up.
- Rewards are regualarly redeemed with a minimum of fuss.
The other option where points are accumulated as usual (per dollar amount spent on the credit card ) and then redeemed for gift vouchers allows the credit card consumer to often increase the value of the rewards. For example a rewards program may offer a $100 gift voucher for 10,000 points and an ipod Nano for 15000, if the consumer wants the ipod Nano they could use the gift voucher toward the purchase and if David Jones is a “partner” of the rewards program as they are likely to be, accumulate more rewards for the portion of the ipod that is purchased with the credit card.
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