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June 07, 2021

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.

Card 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.

Among those booking a flight, 40 per cent have been unable to book the flight or dates they really wanted and almost one-third (29 per cent) had to fly on an alternate date or were forced to choose a multi-stop option (31 per cent).

"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.



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...