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What are credit card rewards and how do they work?

Credit card rewards are incentives that card issuers offer to encourage card usage. They come in several forms:

Types of Rewards:

  • Cash Back: Earn a percentage back on purchases (typically 1-5%)
  • Points: Earn points that can be redeemed for travel, merchandise, or cash
  • Miles: Airline miles for free flights or upgrades

How to maximize rewards:

  • Use the right card for each purchase category
  • Take advantage of bonus categories
  • Sign up for welcome bonuses
  • Pay your balance in full to avoid interest charges that negate rewards

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