Discover credit card: Loyalty for cash back, reward programs

Getting paid to use a credit card, now that's a great concept. But there has to be a catch, right? Not necessarily, if you play your cards right. That's because there are scores of great credit card rewards programs on the market today that pay either cash back, points for merchandise or airline miles in return for using the card.

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Why would credit card issuers pay people to use their cards? It's quite simple, actually. Credit cards can be very profitable for the issuer, especially if consumers concentrate their spending on one or two cards. Research has shown that consumers show much greater loyalty and usage with a rewards credit card, which translates to profits for the banks.

With that in mind, it's a little easier to swallow that there isn't a "gotcha" attached to any of the compelling reward credit card offers. Several major credit card issuers, such as Discover Card, American Express, Citi and Chase, feature cards that offer up 5 percent cash back on everyday purchases and 1 percent on all other purchases. For example, Blue Cash from American Express, the Discover Gas Card or the Citi Diamond Preferred Rewards Card offer 5 percent rewards on everyday purchases. Everyday purchases are quite literally those that most Americans make everyday – like groceries, gasoline and drugstore purchases. And, since these types of retail transactions are made with greater frequency, earning up to 5 percent cash back can drive very strong returns for the card holder.

Many of the early cash back and reward programs either carried an annual fee or paid "up to" a certain percentage. But, when the fine print was read, it showed that much of the "reward" was subject to a convoluted, tiered percentage calculation. For example, the first $2,500 would earn 0.25 percent; the next $2,500 would earn 0.50 percent and so on up to the maximum rebate amount. So, while the banks could advertise a 1 percent reward amount, most people were only earning a fraction of that.

But today, with banks experiencing more competition in the marketplace than ever, the consumers is the ultimate winner. Gone are the chintzy offers that promise one thing and deliver another. Rewards are easier to earn than ever, and deliver what they promise. All consumers have to do to take advantage of the reward credit card game is to figure out what is most "rewarding" to them. Whether its points for an enormous array of merchandise, free gasoline rebates, airline miles or straight up cash, there are rewards credit cards to suit almost every need.

So then, finding the best credit card becomes the real challenge. And that's where comes in. We enable consumers to search, compare and securely apply for credit cards, from a number of categories. Finding the best credit card is then as easy as 1, 2, 3. The best rewards credit card can be located in seconds based on your criteria, whether it's by issuer, card type or type of reward.

So, find out for yourself how it pays to discover credit card rewards. If you haven't used a rewards credit card before, it can be a pleasant realization to learn that you can avoid interest charges by paying the balance in full each month and rack up to several hundred dollars per year in free rewards. Then the big decision then becomes how to spend those rewards that have been earned. And, that's a nice problem to experience.

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Updated: 10-22-2018