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Released: April 24, 2012

Help Desk FAQ

What should I look for in a rewards card?

Most rewards programs offer cardholders airline miles, points that can be redeemed for things like merchandise or gift certificates, or cash back. There are many credit cards that offer rewards, but that doesn’t mean that all of them would be a good deal for you. Rewards cards may charge annual fees and/or a higher interest rate than non-rewards cards; they could place restrictions on when and how you can redeem your rewards; and they might allow your rewards to expire after a certain period. And some rewards programs may require the forfeiture of points or rewards if the card balance becomes significantly delinquent.

If you want a rewards card, choose one that makes it easy to redeem your rewards for something useful to you. If you're interested in an airline “miles” card, check first to see how easy it would be to use your rewards for a ticket to your preferred destinations. It's a good idea to redeem your rewards promptly to avoid having them lose value if the company changes its policies.

If you expect to carry a balance from time to time, choose a card with a low interest rate instead of a rewards card because the higher interest you’ll pay will most likely wipe out the value of any points, miles or other rewards you accumulate.

You can get more information from Consumer Action's credit card surveys, the credit card surveys done by the Federal Reserve, or from rewards card discussion forums at FatWallet.com or Flyertalk.com.