Almost all credit cards today offer incentives to their loyal customers through reward credit cards. Indeed, reward credit cards have come a long way since Discover introduced the first reward credit card back in 1980. This particular credit card gave cash back on purchases as a bonus for its card members.

Today credit cards not only offer cash back bonuses but provide rewards in various forms and manner. Apart from cash back, some credit cards have frequent flier miles programs, gas rewards, and charity donation programs or a combination of these programs. Additionally, credit cards give discounts and freebies that go along with their particular reward programs.

How do reward credit cards work? Generally, the card holder needs to earn points that are equivalent to gas purchases, free travel ticket, free hotel accommodation, car rental, appliances and other cash purchases. Of course the rewards earned will depend on the type of reward credit card you have. Point systems also differ with every credit card company.

There are hotel reward credit cards that give as much as 5% rebates for purchases or expenses made from participating hotels, airlines, and establishments. Some travel reward credit cards and hotel reward credit cards also give away instant bonus points when the card holder makes his first purchase. Other credit cards award instant points the moment the customer signs up for the card and gets an approval.

When it comes to cash back credit cards, most of issuers give a 1 point or double points for every dollar spent on general purchases. Cash back credit cards usually allow its card holder to earn points regardless of where the purchase was made or what type of purchase it was. For this reason, many consumers prefer to apply for cash back credit cards because they offer more flexibility and more opportunities to collect points.

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