Different Types of Credit Card Rewards

Credit card rewards are basically thank you bonuses for using your card—but they come in different forms, and not all of them work the same way.

Understanding the types helps you choose rewards that actually fit your life (instead of just looking flashy on a banner ad).

Everyday Rewards: KOHO Everything

If you like rewards but don’t want to juggle a traditional credit card balance, KOHO Everything Account:

• Grow your savings with 3.5% interest, one of the highest rates in Canada.

• Earn a 2% cash back rate on groceries, eating, drinking, and transportation and 0.5% cash back on everything else.

• There are no foreign exchange fees, so you save on international purchases and travel.

• You can subscribe to Credit Building for $5/month, it's an affordable way to build your credit history.

• Unlimited transactions and free e-transfers.

• No minimum balance required, ever.

Main Types of Credit Card Rewards

1. Cash Back

What it is:

A percentage of your spending returned to you as money (or statement credits).

Why people like it:

• Easy to understand

• Works on everyday purchases

• Can help offset bills or boost savings

2. Points

What it is:

You earn points on each purchase and redeem them for things like:

• Merchandise

• Gift cards

• Travel

• Statement credits

Pros:

• Can be flexible, especially with good redemption options

Cons:

• Value per point isn’t always obvious

• You have to learn the program to get the best value

3. Travel Miles

What it is:

Points or miles tied to flights, hotels, and travel partners.

Pros:

• Can be very valuable if you travel a lot and redeem strategically

Cons:

• Often more complex

• Rewards tied to specific airlines, dates, or programs

If you don’t travel regularly, a simple cash back setup often beats miles you barely use.

4. Store or Brand Rewards

What it is:

Rewards tied to a specific store or brand ecosystem (like a grocery chain or retailer).

Pros:

• High earn rates if you’re loyal to one store

• Great if you already shop there all the time

Cons:

• Less flexible—rewards are often only useful within that brand family

5. Welcome Bonuses & Promo Offers

Many cards advertise:

• Big one-time bonus points or cash back if you spend a certain amount early on

• Intro 0% or low interest for a limited time

Pros:

• Can be very rewarding if you planned that spend anyway

Cons:

• Can tempt you to overspend just to chase the bonus

• Once the promo ends, you’re left with the regular interest rate

The Most Important Rule With Rewards

No matter what type of rewards you choose:

If you carry a balance and pay high interest, the bank usually wins.

Rewards only really “work” if you:

• Pay on time

• Keep balances under control

• Don’t overspend just to earn points or cash back