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Credit Card Points Reward Catalogs Reviews

Comparing the best reward credit cards [3] is easy. You review the percentage-back rewards on each category, compare it to your own spending, and decide based on which one will give you the greatest rewards. It’s a little harder to find out if the rewards you get are worth it, as fewer cards offer cash.

Over the next few days I’ll take a look at some of the catalogs of the most popular credit card companies. I’ll give you the lowdown on their products, where you can get the maximum value out of your points, and a closer look at how each system works so that you can decide on which card to use.

How to Review Reward Catalogs

Credit card rewards, or points systems, always favor the credit card issuer because they control the value of each “point.” It’s a lot like the Federal Reserve in the United States, they wield of lot of power because they can control how much money is in the money supply. Whereas the Federal Reserve does it by putting money into or taking money out of the supply, to affect interest rates, credit card companies can simply change the price of rewards in the catalog without you even knowing.

That’s not to say issuers are sneakily raising the prices and not telling you. With the Internet, if they were doing that then it would come out very quickly and it would be a PR nightmare. However, they can introduce new products at higher point prices and no one would have reason to complain.

The Poker Chip Syndrome

The real benefit of a rewards system over straight cashback is in what I call the poker chip syndrome. When you buy something with cash, you know exactly how much it is. When you buy something with points, it’s a little less clear. You tend to spend more because the price isn’t in hard currency.

Converting Rewards into Dollars

When you signed up for a rewards credit card, you probably did it because they offered a favorable rewards schedule right? Let’s take the Citi mtvU Platinum Select card [4], a card that I use. The Citi mtvU card offers me 5 rewards points for every dollar I spend on books, movies, music, and at restaurants.

In my mind, that’s a 5% reward. It’s not technically cashback but it’s still a 5% rewards card. It’s a 5% rewards card because I believe each Citi ThankYou Network point is worth a penny. When I go to look at the things I can get with points, I have to keep that in mind and buy things that are favorable to me on that conversion rate.

As we look at some of these networks, you’ll find that there are some networks where you can never get a penny per point value in any of their products. That’s the purpose behind these network reviews, to help you maximize the rewards and provide you with enough information, before you get a card, so that you don’t end up with reward points in a horrible system.

(Photo: Andres Rueda [5])