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Racking Up Credit Rewards

Co-Branded Credit Cards

A co-branded credit card is offered by a credit card company that is sponsored by both a bank and a retail merchant, such as a hotel or airline company. Cardholders can earn points for loyalty programs offered by the retail merchant. These cards include a variety of perks and incentives such as discounts or rebates of various types, elite status, free checked bags and priority boarding, etc. One thing to keep in mind, however, is that when you redeem points through loyalty programs, they are subject to award availability.

Transferrable Points Programs

A credit card with a transferrable points program allows cardholders to transfer points to various airline and hotel loyalty programs or redeem points directly for cash, flights, hotel rooms, rental cars, or other redemptions. Most of these cards charge annual fees so it is important to make sure the value of the points you earn outweighs the annual fee. The following are popular transferable rewards programs:

Who is Eligible?

If you are an adult with good to excellent credit established, meaning that you typically have an average FICO credit score of 670 or above, there are many rewards cards for which you are eligible. It is important to know where you spend the most money and choose a card that will reward you for making those purchases.

Good Credit

To get approved for a credit card that requires a good FICO score, consumers typically need to:

  • be employed (there are a few exceptions to this)
  • have no more than one late payment on their credit report
  • Have a healthy debt-to-credit ratio (i.e. credit utilization ratio)

A good FICO credit score will range from about 670-739.

Excellent Credit

To be approved for a credit card that requires an excellent FICO score, consumers typically need to:

  • be employed with a high annual income (there are a few exceptions to this)
  • have a clean credit report that’s void of any derogatory marks
  • have minimal debt.

An excellent FICO credit score will range from about 740-850.

In the next chapter we will review the different types of rewards cards that are available so that you can determine the best credit card offer that fits your needs.