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Cost of the Plan
One of the first things to consider is much the reward plan is going to cost you. Is it a premium credit card that has a yearly fee attached to it or is it something free that you just sign up for? That said, how fast do the points accumulate? I have a free MasterCard that gives me AirMiles™ for every $40 I spend, although, it may be $20 now; I do not use this card a lot so have not paid much attention to it. I also have a premium Visa card that gives me their points and I earn one for every dollar. But, this one I pay a yearly fee for.
Cost of the Reward
Just based on the above, the Visa card sounds like the better deal with a point per dollar spent. But when it comes to what I want to spend my points on, it becomes much more difficult to figure out.
Let’s say I want to visit my friend in Ohio, how many points will each program cost me?
- Airmiles™ - 3400 low season, 4600 high season; additional discount if you have a BMO Airmiles World Mastercard (additional fee)
- Visa – 35,000 points
Cost to Accumulate
Another consideration is how much it is going to cost you to accumulate the points. If you have a reward card that you do not use that often, or one that costs you yearly but you do not charge a lot each month, it may not be worth it to have that particular card.
Types of Rewards
These days, there are so many different options out there that you should be able to find one that works for you and your lifestyle. For instance, I have a friend who does not travel very much so a card that she can redeem for flights and hotels is not worth it for her. But, her and her husband tend to buy a new vehicle every few years so they chose to have a credit card that got them points which they could convert to funds towards a new car. Many cards allow you to redeem your points for a wide variety of merchandise including gift cards if that is your preference.
With all that said, there are a lot of options and decisions to make. The card that you have today may not be the card you use tomorrow. For instance, Airmiles ™ changed their rules a few years ago so that their points expire after five years. I know of a few people who have quit using them, or changed their plans on how they were going to use their points for that reason. I am re-thinking my card choice due to the yearly fee versus how much the flight I want to redeem them for costs. Overall, my flight will cost less in yearly fees than paying cash outright, but not by a lot.