Choosing a Credit Card Rewards Program That Is Right for You
These days, every credit card company is offering a different credit card rewards program. Some have miles, some have gifts, and some – the best of the best – cash back rewards. My credit cards are all a part of the best – with cash back rewards programs.
Think about it – let’s assume in a year you charge $50,000 on your credit card. The typical frequent flyer reward miles programs will offer you 50,000 miles for this level of charging. Have you ever tried redeeming those credit card rewards miles lately? Almost every airline quickly sells out its lowest frequent flyer miles redemption tickets after 2 or 3 seats. Can you believe it? They only usually reserve a few seats per flight for the lowest level of miles for redeeming a free ticket, claiming you can get a free round trip domestic ticket for 25,000 miles. However, it is very difficult to redeem at this level.
What’s Best – Cash Back or Rewards?
Most airlines will charge you double miles to get the free round trip domestic ticket. More than likely, you will have to spend 50,000 of your miles from your credit card rewards program for this domestic ticket. Now let’s compare that to the average cash back rewards program. Most of the best cash back rewards programs offer 1% cash back on all your purchases. There are a multitude of credit cards that offer the 1% cash back, and some even offer up to 2% cash back. There are even a select few credit cards that offer extra cash back for certain purchases, like restaurant and gas charges, with up to 3% cash back!
But for purposes of this discussion, let’s focus on the 1% cash back credit card rewards program. Assume you charge the same $50,000 in a year, but with a credit card that offers 1% cash back on all your purchases. At the end of the year, this would entitle you to $500 cash back. Most domestic airline tickets these days charge, with advance bookings, nowhere near $500 for a ticket. In fact, they are usually less than $250. So with this $500, you could purchase two domestic tickets!
Better yet, you can use your $500 from your credit card rewards program for whatever you want. Why be forced to spend it on an airline ticket or any other gift reward item for that matter? Even more exciting is that there are now numerous cards offering 1.5% and even up to 2% cash back. It’s a no-brainer; choose what’s best – a cash back rewards credit card is the only way to go! Find a credit card rewards program and card that works for you!