Decoding Credit Card Rewards
When shopping for the right rewards credit card the details and fine print can get a little confusing. Terms come up like “blackout dates” for travel cards and “eligible purchases” for cash and point cards. And of course, how do you...
When shopping for the right rewards credit card the details and fine print can get a little confusing. Terms come up like “blackout dates” for travel cards and “eligible purchases” for cash and point cards. And of course, how do you even redeem the rewards you earn? Let your worries subside as we dive in to take a closer look at the mysteries surrounding each type of rewards card.
Disclaimer: The major card distributors in the credit card industry offer cards in nearly all of the below categories. For the purposes of this article, we’ll take you through cards from the top seven financial institutions (according to total dollars paid by consumers) for credit cards and educate you about their cards. We’re not necessarily concerned about which one is best. More importantly, we’ll break down the nuances of each so you can rest easy knowing which ones make you jump through hoops, and which ones leave you smiling when you collect your rewards.
Travel Rewards: This category can mean a few different things. Travel rewards mean that the purchases you make accrue points that you can redeem for airline tickets, hotels, cruises, or car rentals. Some offer all of these rewards while others offer just airline tickets. Let’s take an across the board look at these different travel rewards credit cards.
Alaska Airlines Visa Signature®
How to earn miles – Miles are earned at a rate of one to one meaning one mile for every $1 spent on your card. So what does that mean? Earn 25,000 miles and you have a roundtrip ticket anywhere in the US. Earn upwards of 80,000 miles to travel anywhere else.
How to redeem miles – The best way to redeem miles is to go to alaskair.com and use your mileage plan ID to create an account and book travel. They’ll also offer you information on how to contact Alaska’s partner airlines.
Benefits/Extras – This is a great credit card for the avid traveler. With 15 partner airlines and over 800 destinations worldwide the globe is pretty well covered. No blackout dates apply. To add to the benefits you receive an annual companion pass, meaning every year you can get a ticket for another traveler for $121 for a domestic flight. Usually, the savings make the annual fee worth it. Also, there are no foreign transaction fees.
Capital One® Venture® Rewards Credit Card
How to earn miles – This card is a bit simpler. You earn two points for every $1 spent on the card. The conversion works out to 100 points = $1 in travel rewards.
How to redeem miles – To redeem miles simply use your card on any travel website or app (airline, car rental, hotel, etc.), or travel agent. There is no mention of blackout dates in this card’s Terms and Conditions. Then contact Capital One via telephone or capitalone.com within 90 days of the purchase to receive a statement credit.
Benefits/Extras – You’ll get some travel upgrades and savings, and there are no foreign transaction fees.
American Express Delta Platinum Credit Card
How to earn miles – Earn one mile for every $1 you spend. 5,000 miles is generally equivalent to $50.
How to redeem miles – Miles are redeemed through delta.com. A flight must be marked as “Pay with Miles eligible”.
Benefits/Extras – The benefits for this card are nearly endless (they ought to be with that annual fee) and it is a complicated card. Every reward seems to come with some sort of stipulation. Too many to discuss in this article. However, notable benefits include an annual Companion Certificate at $75 or less for domestic flights. There are also no foreign transaction fees. If you find yourself flying on Delta often then this is your card. The benefits are undeniable.
Points for Redemption: These types of credit cards fall into a miscellaneous category. This means that you can get cash back and travel rewards like other cards, but you’ll also have the benefit of redeeming points for merchandise or gift cards. There are far fewer of these cards available, as most opt for travel or cash back benefits. Every one of them is just a little different, so let’s see if we can decode the features and benefits of point’s credit cards.
Chase Freedom UnlimitedTM Credit Card
How to earn points and what they get you – This card offers 1.5 points for every $1 spent. One hundred points are equivalent to $1. Points are redeemable for gift cards to many retailers and restaurants. You can also use points for statement credits or have cash direct deposited into your Chase checking account.
How to redeem points – Points can be redeemed online at chase.com where Chase will direct you to a catalog of retailers to choose from. Even simpler, you can link this card to your amazon.com account and use points to purchase merchandise.
U.S. Bank Cash 365TM American Express® Card
How to earn cash back – Get 1.5% cash back on all purchases (didn’t we say these cards are more straightforward?!).
How to redeem cash back – Have your cash repaid as a statement credit, have it directly deposited into your US Bank checking account, or redeem your cash back for rewards cards, which is effectively a prepaid Visa debit card. Cash back can be obtained under the “Bank Rewards Center” tab at usbank.com (you must be signed up for online banking).
Discover it® Card
How to earn cash back – This card has a unique cash back system. Every quarter Discover will come out with a way to earn 5% cash back. At the time of this article's printing the 5% cash back reward is gained by purchases from home improvement stores and amazon.com (Check out Discover’s Cashback Calendar every quarter). Outside of this deal, you’ll earn 1% cash back on all other purchases.
How to redeem cash back – Have your cash back repaid as a statement credit, deposited to your bank account (whichever bank that may be), or make a charitable donation. Discover also offers gift certificates, prepaid Discover debit cards, or eCertificates. To redeem your cash back in any form go to Discover.com, or call 1-800-347-3085
Conclusion: As you can see there a number of benefits and even more ways to redeem them. Reading the fine print is a must when applying for a credit card. There are so many hidden benefits and stipulations for those benefits that it is difficult to keep track. We recommend signing up for online banking with the institution that provides your credit card. It will make life much easier when it comes to tracking and redeeming your reward points.
Related: This article was written with the intention of educating you about how the cards work, not to tell you which is the best card. For information on credit card comparisons, there are online tools available. Visit our marketplace for the most current credit card offers.