Credit Card Rewards Programs Explained: Citis Thank You Rewards Network

Credit card companies are in constant competition with one another to gain you as their customer. One way they approach this is with 0% introductory rates. Another approach is the rewards program. In this first of a series of in depth articles on credit card rewards programs, the president and CEO of Credit Card Depot Inc examines the Citi Thank You Rewards Network Program.

Currently, the Citi Simplicity(SM) Rewards Card, the Citi Platinum Select, and the Citi Diamond Preferred Rewards Card all offer thankyounetwork rewards. But what exactly are these rewards. They are points earned for every dollar spent that can be redeemed for everything from gift certificates to reduction in your interest rate. Here, I will focus on the gift certificates. Beginning at around 1,500 points, you can receive a free $10 gift certificate to a wide range of major retailers. As our points increase, so do their value. For 10,000 points, you can get a $100 gift certificate to these same great retailers.
Aside from retail gift certificates, you can vouchers for hotel discounts, free skiing pass, free movie tickets. There truly are a ton of rewards options available through this citicards program.

Now, some of you may be rolling your eyes at the fact it takes $10,000 of spending to get $100 in rebates. But the fact of the matter is, getting rewards is easier than you think. For starters, both the Citi Simplicity(SM) Rewards Card and the Citi Diamond Preferred Rewards offer new consumers a great signup incentive: thousands of free points. For the Citi Simplicity(SM) Rewards Card, all you have to do is make one purchase in your first three months with the card and you are awarded a $100 gift certificate. Imagine that, a credit card paying you to use their card. The same holds true with the Citi Diamond Preferred Rewards Card. Citicards will give you a $50 gift certificate for using that card.

Okay, so you get the free points up front, but how can you really take advantage of the rewards offered by Citibanks Thank You Network. Use you card for all your everyday purchases and pay your balance in full each month. Between groceries, gas, eating out, and other common expenses, you might find yourself with a few hundred dollars worth of rewards by the end of a year. Not too bad for simply using your credit card in place of cash or a debit card.

Citis Thank You Rewards Network, which charges no annual fee, adds great value to Citibanks credit card offerings. While the Citi Simplicity(SM) Rewards Card and the Citi Diamond Preferred Rewards Card offer the added incentive of a free gift certificate, the Citi Platinum Select card should not be overlooked, as it offers one of lowest interest rates on the market.

Overall, the credit card rewards available through Citibank are top notch. However, in my next article, well see how they stand up to the credit card rewards pioneer, American Express.

In 1950, the first credit card that could be used at more than one, specific merchant emerged on the market. The Diners Card, started by Frank McNamara, was an invention that got its start when Frank was having a business meeting over dinner, and realized he had forgotten his wallet at home. Of course, the man was extremely embarrassed, and had to call his wife and ask her to bring him his wallet so he could pay for the bill. Then the light bulb over his head turned on, and he thought it would be incredible to have a way to purchase things wherever people shopped, and pay for them later. The Diners Card started with 200 card holders, and within a few years- banks and private companies began offering credit cards.

Eventually there were so many credit cards to choose from that the credit lenders had to come up with new ways to stand out from the competition and entice people to select their card over another. Credit card reward programs were born sometime around 1986. Discover card began offering cash back based on the amount of money you spent on your credit card, and the first frequent flier miles for credit card users was with Continental Airlines. The frequent flier miles were such a hit that now every airline has joined in the rewards programs, offering discounted trips, free complimentary airfare, travel accident insurance- all based on the amount of spending you do using your credit card.

Now that just about every credit card has some sort of rewards program in place, once again card companies are finding themselves looking for new ways to entice more customers to slide their credit card into their already overflowing card holders in their wallets. Rewards programs have to be turned up a notch, and become so amazing, so absolutely unforgettable that consumers cant forget them and will apply for and use their card more than the other seven in their wallets when they go shopping!

Currently, the trend in credit card rewards programs appears to be creating cards that offer very specific rewards to cater to what people are doing with their lives. Michelle Shepherd, of MBNA Corp (one of the largest credit card lenders) says the rewards programs are developed with real people in mind, offering something for everyone whatever stage in life a person is in, whether its someone whos trying to reduce a mortgage or someone dreaming of going to the Super Bowl. This is seen in credit cards MBNA offers with rewards programs related to NASCAR and GMAC. Also, Visa offers several credit cards with Disney rewards programs- your spending earns you points towards travel to Disney theme parks and on the Disney cruise line.

Credit card interest rates have begun to rise overall, which is another reason why lenders are trying to entice new customers with their fabulous rewards programs. It would be hard for a card to sell itself to new customers with a high, unattractive interest rate- so lenders have learned to sell the idea of the rewards programs, hoping to gain your interest from that and divert your attention from the not-so-glamorous interest rates.

Keep in mind that while rewards programs can seem very rewarding when you are considering a credit card offer, there is often a lot of information you wont find out until after you apply for and receive the card. Rewards programs often have limitations, meaning once you reach the ceiling you are no longer eligible for the rewards program benefits- information they dont normally disclose in the credit card offers you receive in the mail. Also, for rewards programs that allow you to purchase items with points earned based on the spending you do using your credit card, keep in mind you will probably be charged additional money for shipping and handling of those items. For cards that offer travel discounts and airline tickets, many rewards programs require you to then pay transaction fees to redeem them.

Credit Card Reward Programs: Getting The Most Out Of Your Credit Cards

Credit cards can earn you cash, airline miles, or rewards. To get the most out of your credit card company, you have to choose the right program and use your card often.

Pick The Right Program

Do you want a free trip to Hawaii or cash at the end of the year? Credit card companies offer a variety of reward programs, so choose the one that you like the best.

If you are planning to earn airline miles, pick a destination and make sure your rewards program covers that area. Some credit card companies partner with a specific airline while others offer generic travel miles.

Cash rewards usually work out to 1% to 5% back on all your purchases. At the end of the year you could end up with a sizable check. Cash rewards dont apply to transfers or cash withdrawals.

Generic reward programs offer points for your purchases. Those points can then be redeemed either for products through the credit card company or gift cards for name brand stores like Starbucks, Home Depot, or Toys R Us.

Earn Your Rewards

To truly get the most out of your rewards program, you will need to use your credit card often. By using your card to pay for all your purchases, including groceries, prescriptions, and household bills, you can earn an airline trip or over a thousand dollars in a year.

Also look for special offers that are included in your monthly statement. Sometimes you can double your points by using your card with a certain merchant. You can also receive coupons for additional savings at these places.

Dont Get Caught

Reward programs usually charge a higher interest rate than other credit cards. To make sure you dont get stung on finance charges, pay off your balance every month.

Instead of whipping out your credit card every time you want to make a purchase, start with a monthly budget. Plan on how much you can afford to spend and stick with it. If you do carry a balance, know how much it will cost you.

Not only can you earn rewards for your purchases, you can also improve your credit score by making regular, on-time payments. The more responsible you are with your credit, the more likely you can qualify for more.