Many credit cards users receive rewards on purchasing items through the card, like the frequent flier points, cash back incentives or gift certificates. Different cards offer different schemes but generally the users get gifts worth 0.25% - 2.00% of the amount spent on a particular item. Visa, MasterCard etc. these networks have increased their fees so that the issuers could fund their respective reward system.

Credits card like the Advanta Platinum BusinessCard issued by advanta offers up to 5% cash back rewards. These rewards are actually a liability to the company and it’s expensed at the time of reward redemption. Because of this many issuers try to avoid redemption by compelling the cardholder to call the customer service for rewards.

Redeeming credit cards rewards is generally very well hidden by the issuers on their respective websites, this is because it would be expensive to the issuer and hence they encourage the customers to go for some gift certificates instead.These rewards point actually cut big amounts into an issuer’s already tight bottom line; this is because of the competitiveness in the market. Therefore the management of reward points and incentives should be done carefully in order to ensure proper portfolio.