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Getting the most from a rewards card

A credit card is no longer just a credit card. Whether you want to earn travel points or get cash back, there are plenty of rewards options -- and the list of cards to choose from is growing. According to Patrick Sojka, founder of RewardsCanada.ca, a website dedicated to providing information on Canadian rewards programs, more companies than ever are offering rewards as people make the shift away from cash.

"Companies are looking for ways to attract customers," he says. "For the amount of cards out there, we are overwhelmed [with options]."

But just because there are lots of choices doesn't mean choosing a rewards card has to be overwhelming. With the right approach, you can find the card, or cards, that work best for you and start reaping the rewards immediately.

Getting started The first step is simply deciding how you want to be rewarded. Julie Hauser, a media relations officer at the Financial Consumer Agency of Canada, suggests asking yourself a simple question: how likely are you to use the benefits?

Your bank alone might offer you a host of options. Tamar Nerserian, a communications officer at TD Canada Trust, says that TD gives their customers several different card choices.

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"We have three types of rewards offerings: travel, cash back and auto," he says. Within each, there are different levels of cards for customers to choose from.

Sojka says having all these options -- from your bank and from outside companies -- benefits consumers.

"I think [companies] are coming out with cash back cards because they're realizing customers already have a travel rewards card," he says, adding there's nothing wrong with signing up for more than one type of card or even more than one card within a rewards class. Especially when it comes to travel rewards, he says carrying multiple cards is a smart move.

"All the brands run separate promotions with certain hotels and airlines," says Sojka, and suggests that people consider signing up for more than one to take advantage of the rewards offered by each.

One or more cards
Once you start considering multiple cards, it becomes even more important to consider the payoff, especially if the cards come with annual fees.

"If you are considering a card with an annual fee, make sure it offers you better value than a no-fee card," warns Hauser. "Before making a decision, compare its annual cost to the additional rewards and benefits that it offers over the no-fee card."

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-- Posted June 20, 2012
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