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Credit Cards Bonuses and what they mean

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Is it possible to save with bonuses and discounts on your credit card?

In 2018, there were approximately 1.1 billion credit cards in the United States, according to Statista. The increase in the of these plastic cards has also increased the advantages they offer. Among the most prominent are bonuses and discounts.

These advantages can become a great tool to save on your purchases, although how these bonuses are applied may vary. Knowing how these discounts work would help you get the most out of them. 

Bonuses use for your credit card in installment purchases

This bonus is a percentage of the amount used in installment purchases, which will be returned to you. In some cases, it can be as high as 7%. But in general, one of the requirements to obtain it will be to make purchases with deferred payment. In this way, even if a discount is obtained for the purchases made, the costs of the applied interests must be added.

Capital accumulation

This is probably most common. Bonus accumulate over a monthly period and is returned to the same card as money in your favor. So you can either pay off outstanding capital resulting in savings in interest or transfer it to a checking account.

Credit limit

This bonus will increase the credit limit. This option is not highly recommended or practical, since it can encourage you to spend more with the card and it is not very useful if there are no plans to use all the credit you have available.

Sign-up Bonus

Sign-up bonuses entice you to apply for your credit cards. A sign-up bonus consists of points or miles awarded after the first purchase or awarded after a modest amount of spending in the first three months after registering for the card.

The most notable signup bonuses in the past that have now expired include Capital One’s “Match My Miles” giveaway, which awarded up to $ 1,000 in statement credits to cardholders, and British Airways Visa from Chase, which offered 100,000 generous bonus subscriptions.

Discounts on purchases by use of the card

In addition to bonuses, credit cards can also offer discounts on purchases. Depending on the plastic you choose, these discounts will vary in their characteristics.

Discounts at gas stations

One of the most common is to get a discount when refueling. In this case, the discount applies exclusively to service stations that are part of the promotion. Obtaining a discount percentage on the capital used in the previous refueling.

Discounts in establishments

This discount is applied directly to the purchase in the participating establishments. The problem with this type of discount is that you must adapt your purchases to these establishments to achieve it.

Points programs

Purchases made accumulate points based on spending. In this way, you will get more points the higher the amount of each purchase. These points can be exchanged for different gifts specified based on the program.

 Indeed, credit cards have limits for returns. Depending on the entity, it can be monthly or annual, so once we exceed this limit and it will not allow us to continue accumulating. It can also be the case that the returns are a root of a promotion that expires after a certain time. We must be attentive to the promotional period, in the latter case.

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