What is the difference between a regular credit card and a rewards credit card?
A regular credit card and a rewards credit card are similar in that they are both credit cards that can be used to purchase items on credit. However, the difference is that a rewards credit card offers points or rewards for every purchase that is made with the card. Depending on the rewards program, the credit card holder may have the opportunity to earn cash back, redeemable points, or even travel miles. In California, where credit card laws are subject to the Federal Credit CARD Act, many credit card companies offer rewards cards to their customers. The Federal Credit CARD Act of 2009 protects consumers from certain practices that are deemed to be unfair or deceptive by prohibiting the fees and interest rate increases that had previously been common with credit cards. These laws ensure that consumers are provided with the information they need to make responsible decisions when using credit cards. Under the Federal Credit CARD Act, rewards credit cards must also comply with all of the regulations that regular credit cards must adhere to. This includes the requirement for a 45-day advance notice of any fee increases, caps on late payment fees, as well as agreements from card issuers to allow card holders to opt out of any new rate increases. Overall, the main difference between a regular credit card and a rewards credit card is the rewards program attached to the card, which offers the cardholder additional benefits for using their card. When used responsibly, rewards credit cards can offer valuable rewards and incentives, giving cardholders the opportunity to save money or earn various rewards.
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