Is a 'rewards card' right for you?
Remember, it's not a reward if it costs more to get than it's worth.
from the March 19, 2007 edition
Page 2 of 3
4. Shop around. If you decide rewards are right for you, you have thousands of cards from which to choose.
If you want to research them, credit-card issuers like Chase and Bank of America offer information about their credit cards online, and cardratings.com offers recommendations and consumer reviews. "We pride ourselves on having a card to suit almost any consumer's needs," says Tanya Madison, a Chase spokeswoman.
She's not kidding: Chase's cards range from the mundane (the Academy of General Dentistry Platinum Visa) to the bizarre (Eskimo Joe's Platinum Visa, the KISS Visa).
So should a confused consumer simply settle for the Chase PerfectCard (yes, it exists) and call it a day?
Well, no. The goal is to get the most value out of your rewards as possible, says Curtis Arnold, founder of cardratings.com.
Mr. Arnold follows his own advice: He says he got close to 1.8 percent cash back last year – more than $750 – using the Blue Cash card from American Express, a tiered card that gives a higher percentage of cash back the more you charge.
5. Consider going the debit rewards route. You get fewer benefits with debit rewards, but you avoid the risk of running up debt. Credit-card programs typically give you one point or one mile for every dollar you spend, but the typical debit rewards program is one point or mile for every $2, says Chris Allen, senior manager at Dove Consulting. Some offer just one point for every $3.
Bank of America's "Keep the Change" is a hybrid program that combines a savings program with rewards. Debit-card purchases
are rounded up to the nearest dollar, and the difference is put in the customer's savings account. For three months, Bank
of America matches these savings. After that, the bank deposits 5 cents for every dollar saved this way, up to $250 a year.
It's not a rich rewards program, but at least it encourages a low level of savings. [Editor's note: The original version incorrectly named Bank of America's hybrid reward program.]
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