Tiered Versus Flat Rewards

A tiered reward system is a rewards-earning calculation that rewards card users for spending more. As you spend more in a tiered system, the percentage of your rewards increases, up to a maximum. For example, a tiered reward offer might offer you 1 percent cash back for the first $500 spent and 2 percent for the next $500 spent, up to a maximum. Some cards also allow you to unlock additional rewards when you hit a certain amount of spending in specific categories. For flat reward systems, card users typically get a fixed reward offer regardless of the amount and type of purchases made.