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How to sort through frequent flier rewards programs

By Ben Woolsey

Finding the right credit card reward program can be daunting. Rewards were inspired by competition within the credit card industry, whose members are willing to share some of their profits with consumers as a way of creating brand loyalty. Now rewards have become a commodity and a cost of doing business for the credit card companies.

Compare Reward Credit Cards

Credit card rewards can take many forms, but all involve an earning process based on card usage (purchases and or balance transfers). To intelligently sift through all the options, the first question a person should probably ask is what type of reward is most meaningful to them. While one person might be persuaded to apply for and use a cash back credit card most often, another would prefer airline miles. Others might be motivated by reward points, which actually are the most flexible type of rewards. Reward credit card points can be used to purchase a wide range of reward products including name brand merchandise, airline tickets, entertainment, gift certificates and even cash.

Cash back reward credit cards have raised the bar in recent times. Discover card launched on of the first cash back programs that paid "up to" 1 percent for all card purchases. This meant that the cash back was earned in a tiered process. For instance, the first $1,500 spent on the card would earn .25 percent cash back, the next $1,500 would earn .50 percent. Only spending above a higher threshold, such as $5,000 would be entitled to earn a full 1 percent.

Today's market leaders offer a flat 1 percent on all purchases and do not require a tiered earning structure. This is much simpler to understand and considerably more customer friendly. Certain issuers, such as Citi, Chase and American Express are even offering an opportunity for cardholders to earn a full 5 percent on everyday purchases made at grocery store, drugstore and gas station locations. These types of rewards include both cash back and reward point programs.

And don't forget frequent flier airline credit cards. These programs have become both richer and more numerous in recent years. New airlines such as JetBlue have entered the fray, and launched a new airline credit card in partnership with American Express. Most programs allow you to earn miles or mileage points which can be redeemed for a free airline ticket once a predetermined threshold is reached. Generic airline reward programs also have been created by the major credit card issuers to offer consumers more flexibility. These programs allow customers to earn a free ticket on any major U.S. airline. The only limitation is that the miles or points earned can not be transferred or added to another airline's frequent flier program.

To sum it all up, simply identify which rewards group you would like to belong to: points, miles or cash back. Then, it's just a matter of visiting our card sections that rank the most popular cards in each category. There you can shop and compare and apply securely online for the credit card that best suits your needs.

Published: June 22, 2005


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Credit Card Rate Report

Updated: 07-28-2014

National Average 15.03%
Low Interest 10.37%
Balance Transfer 12.64%
Business 12.80%
Student 13.27%
Cash Back 14.91%
Reward 15.00%
Airline 15.46%
Bad Credit 22.73%
Instant Approval 28.00%

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