 Hello everyone, my name is Amit Dam of Edon Journal. Today I'll talk about how to pick reverse credit cards. We live in a time when credit cards intertwine every stage from waking up to going to sleep at night. And why not? The protections, benefits and rewards credit cards offer are hard to ignore. If you are to use credit cards on a daily basis anyway why not take advantage of it by maximizing credit card rewards. To get most out of your credit cards you need to understand how different kinds of rewards work. Today I'll go over the rewards basics you need to know before making your rewards selections. One important note I would like to point out that this article is not about how to pick reverse travel credit cards. I'll do a separate piece on reward travel credit cards as you need to understand first how different kinds of rewards work before moving to picking up reverse credit card. There might be hundreds of different rewards credit cards but if you break them into categories there are only three rewards credit cards. The first one is cashback rewards credit cards. The second one is travel rewards credit cards and everything else falls under other rewards credit cards. Let's decipher them one by one. Cashback rewards credit cards. As simple as it sounds you receive cashback for each dollar you spend on your credit cards the rate of return is usually one to two percent. However there are credit cards that offer three to four percent cashback on selected categories such as grocery, drug store etc. Example Scotia Momentum Visa Infinite Card. Cashback rewards are simple and easy to understand however keep in mind that cashback rewards cards do not offer the most of value you can get out of your credit cards like travel rewards credit cards. Travel rewards credit cards. Travel rewards category is where you can get maximum return for your dollars that you spend on credit cards but it can be quite complicated based on what kind of rewards you are looking at. Let's talk about different types of travel rewards. proprietary rewards points. These cards offer points usually one cent per dollar which can be redeemed through the credit card company for any flights, hotels or travel related matters. The beauty of proprietary rewards points is that you don't need to spend time mastering various loyalty programs however your returns are usually the lowest among other types of travel rewards as you are always getting a fixed dollar value for each point. Example BMO World Unit MasterCard. Co-branded or loyalty program rewards points. These are hotel travel credit cards, airline travel credit cards and so on. These types of cards can be co-branded with specific hotels, airlines or their loyalty or frequent flyer programs. As these cards offer variety of programs you can pick from this is where you can make most money. If you are average knowledgeable about the loyalty program your return can be easily 2 to 4%. If you are extremely knowledgeable about the loyalty program you can make lucrative returns such as 4 to 8% on your credit card spending. Example TD Airplane Visa Infinite Card. American Express Starwood Preferred Guest Card. Hybrid Rewards Points. This is a combination of both worlds. Hybrid points offer tremendous flexibility because you can use these reward points to offset your travel cost through credit card company or you can transfer your points to various other hotel or flight programs. So this type of credit card can work for both novice or expert users. Keep in mind that you will get more value for your dollar when you transfer your points to loyalty programs rather than using points to offset travel expenses through credit card company. Example American Express Gold Rewards Credit Card. Other Rewards Credit Cards. From coffee shop to supermarket, gas station to automaker and any other bizarre credit cards you can possibly think of that do not fall under cash and travel category are under other rewards. These credit cards are only good when you want to shop and use your rewards at specific stores or for specific reasons. Rewards are not that great and options and features are limited for these types of credit cards. So now you know the basics of different types of rewards credit cards. I'll summarize everything in brief. Cashback Rewards easy and simple to understand but returns may not be that great. Go with this type if you do not travel and want hassle free rewards from credit cards. Travel Rewards can be complicated but offers excellent returns. Go with this if you travel and want to get maximum rewards out of your credit cards. Other Rewards. If you want to stick to specific stores or products and don't mind whatever returns you get this is for you. That's all for today. Thank you.