Everyone loves rewards points or the frequent flyer miles that come as a benefit of using credit cards.   Haven’t we all heard about the latest trip that one of our friends took without having to pay for the flight and possibly the hotel because it was all booked with rewards points or ‘miles’?

 

But which travel rewards cards are best?  How much are those points really worth?  A lot of what determines the best travel rewards credit card for you is determined by your needs, and spending habits.  

 

Rewards programs may offer airline miles, gift cards, other merchandise, or cash back, but which one is really offering the most value?

 

Considering that rewards points and airline miles have for the most part been standardized such that one dollar spent is roughly equivalent to one cent of value.  Cash back credit cards typically follow this same equation,

 

What this means is that if your card offers you one reward point for every dollar spent and another card offers you 1% in cash back, you may want to opt for the cash back and avoid any points or airline miles limitations or restrictions.

 

While cash back is often the best rewards card option to maximize value, be sure to keep in mind that annual fees should influence your decision on which card to apply for.  Remembering that each dollar spend on a credit card roughly results in one cent of rewards value,  if a rewards card carries a $49 annual fee, you’ll need to be planning to use your card for at least $4900 of purchases over the year before to justify paying the annual fee.

 

Other factors to weigh when considering your best rewards card options include: 

 

• Interest rates:  Don’t let an attractive rewards program tempt you into paying a high interest rate if you carry a balance on your card.   Interest charges can add up fast, and the attraction of earning rewards points you earn may not make sense if you end up paying significant amounts of interest.

 

• Introductory offers:  Often card issuers will offer a significant amount of rewards points or frequent flyer miles or cash back to attract new applicants.   These can be a nice way to accumulate some points or cash for that next vacation.

 

• Point ratios:  Some cards may go beyond the standard rate and offer two points or 2% cash back on purchases.   Don’t forget to check out the annual fees and interest rates associated with these cards, but with twice the typical benefits, these cards may stack up higher than other rewards cards.

 

• Other benefits.  Sometimes that annual fee might be worth it for the purchase protection and other benefits.   If you like the peace of mind these services provide, than you may take the annual fee out of your rewards points comparison.