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Deciding which credit card rewards program is the best can be just like comparing oranges to apples. With so many different kinds of credit card rewards available such as cash rewards, points, miles, discounts on services and products, gift cards and airline travel, picking one over the other can be a difficult task. So how should you choose? First of all, begin by looking at your expenses and deciding where you are spending most of your money. In this way, you'll be able to understand where you will get the best opportunity to earn rewards. Analyzing your expenses is the first step towards finding out where you can earn maximum amount of rebates, discounts, cash back rewards, points or miles.
Though the idea of getting free airline tickets definitely sounds appealing, the fact is that you might not actually be spending enough money in certain categories to get big rewards. If the only places where you spend money to earn rewards include some hotel chains or certain airlines, you might not be spending enough to get free hotel stays or flights. In the same way, if you're not in the habit of driving too much or are not planning to take any long trips, you will most likely not be interested in getting gas cards.
Credit card rewards come in different forms, and you should choose the one that would entitle you to maximum amount of benefits. Let us take a look at the different reward programs in detail:
- Travel miles: With a miles credit card, you can redeem the collected miles for discounted or free travels as well as for other options. Most of the branded airlines as well as hotels provide discounts or free rewards that work only at specific hotels or airlines. Make sure to check the terms and conditions, seat restrictions and blackout dates before choosing this option. Travel miles usually have an expiration date on their use as well
- Points: If you choose to get points for the purchases you make, you will most likely get one point for each dollar you spend. Besides this, you will get more points in certain categories or with certain merchants. With most credit cards, you can redeem the rewards when you reach 1000 points. In case of some cards, you might be able to use the accumulated points for your next hotel stay or car purchase. Make sure to check for expiration date of the points beforehand to gain maximum benefit.
- Cash rewards: If you're using this kind of rewards program, it can be redeemed for gift cards from different brands, merchandise or cash back. If you want to get cash back on your purchases, it would be a good idea to get rewards in the form of bank deposits or account credits that you can use to pay your next credit card bill.
Now that you have understood the different kinds of credit card rewards, you will be able to make the right choice when choosing the credit card program that will benefit you the most.