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Shopping for a rewards credit card

 

If you're shopping with cash or debit, chances are you're missing out on free money or exotic trips. That's the mantra of Brian Kelly, the founder of a website called ThePointsGuy.com. Brian blogs about the best deals available on rewards credit cards and how to combine offers to get the most out of your annual fees.

Sound bite, Brian Kelly, Founder, ThePointsGuy.com:

"There's value to be had. You know miles and points, no matter what currency, it's value. So if you're not getting any miles and points, you're simply just taking cash and throwing it away. By only using cash or debit, I understand that can help you, you know, keep track of your finances, but there are even debit cards out there that will give you miles. So, really there's no reason not to be getting in on this game."

When shopping for a rewards card, it can be hard to find the best deal. Sign-up bonuses, customer service perks and bonus points for certain transactions can make for some tricky math.

Certain perks are easy to put a value on. For example, you can multiply the number of times you fly per year by the cost of checking your bags to see how much a free checked bags perk will net you. But how about access to VIP lounges or a higher level of customer service? Those require some personal contemplation on what you think those perks are worth. It might seem tedious, but total up the value in all the cards you're considering, from points traded in for hotel stays to cash-back rewards, subtract any annual fees, and you'll be able to make an apples-to-apples comparison.

Sound bite, Brian Kelly, Founder, ThePointsGuy.com:

"It really is all about doing the math and understanding what you spend your money on because there is so many different bonus categories these days. And ultimately, what is it that you value? If it's saving a couple hundred bucks on your monthly budget, then do the cash-back."

A few words of caution, however. Many rewards cards come with an annual fee. Make sure that the value of the perks consistently outweighs the fees. Also, many of the bonus points offered for signing up for a rewards card only materialize after you've hit a spending threshold. This can be a clever trick that causes you to start carrying a balance in the first few months of holding the card. Don't spend extra just to get bonus points. Instead look for a card that has a more attainable spending threshold. To shop for the rewards card best suited to your needs, check out the free search engine at Bankrate.com. I'm Lucas Wysocki.

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