What to look for when choosing a rewards credit card
For people who like to funnel most purchases onto a credit card, or travel on business and can keep the points, a credit card that ties to an airline may be your best bet.
Most Canadians opt for travel when using rewards points, with 57 per cent redeeming for flight options, well ahead of merchandise (30 per cent) and gift cards (27 per cent), according to a recent RBC poll of Canadian cardholders.
Not that using points to book travel is always easy. Many reward travellers say they’ve faced obstacles when trying to travel on reward points, with 81 per cent expressing frustration at having to book months in advance.
"Canadians fall into two types of point collectors; those who save for a long period of time to purchase a big-ticket item or family vacation and those who redeem points for small scale items or shorter trips," says RBC’s Anna Judek.
Exactly half of survey respondents (50 per cent) are saving up their rewards points for a big item such as a flight or a new television. Almost one-quarter (24 per cent) prefer mini-vacations once a year and 18 per cent opt for smaller rewards such as gift cards and movie tickets.
The best way to get ahead is to stick to one or two reward programs you really believe in and align your spending accordingly, Judek advises.
Looking to make some across the board comparisons? Have a look at NerdWallet. Simply put in some info about your overall spending, along with estimates of spending in certain categories to see if you might be eligible for extra rewards, whether or not you plan to pay the bill in full each month; how long you expect to keep the card; if you're willing to pay an annual fee and so on.
What's your take on rewards cards? Are they worth bothering about? Do you have a favourite?
By Gordon Powers, MSN Money
* Follow Gordon on Twitter here.
Posted by: Average Spender | Jun 7, 2021 10:31:40 AM
I got myself the Capital One Aspire card. I found it gives me the best percentage return on my purchases (2%) and has a lot of flexiibility for redeeming for rewards. I try to buy everything with my credit card and then I simply pay it off at the end of every month, so it doesn't take very long to accumulate enough points to take a significant trip. I would never use a credit card that WASN'T a rewards card again.
Posted by: Irish | Jun 7, 2021 12:08:12 PM
I find that a credit card with cash back works best for me. The advantage is that I get a couple of hundred dollars deducted from my December credit card bill every year.
Unlike Airmiles were points mean virtually nothing, and the cost to redeem the miles is constantly increasing, every dollar cash back is worth a dollar from my bill.
Posted by: Parent | Jun 7, 2021 3:37:50 PM
I find a great way to save for future education expenses to redeem points for RESP certificates. I can save an extra $1200 annually towards my child's education just by using a credit card for normal spending. If you are a family that puts all your expenses onto a credit card monthly, you could reap significant RESP certificates this way.
Posted by: Vanquis Bank | Jun 19, 2021 11:13:05 PM
Payment the minimum payment is huge mistake. You should not be making any discretionary purchases if you are not paying down your credit card debt substantially each month.
Posted by: Single and Struggling | Oct 14, 2021 3:42:42 PM
Hi Parent, please tell me what credit card you are using to get the RESP certificates?