If you’ve researched rewards cards, you’ve probably fallen down the rabbit hole of sites that take rewards-maximization (and cards like the Chase Sapphire Reserve) very seriously.
And it’s true that there is serious value to be gained from flexing multiple powerful cards, maximizing every purchase and doing a lot of research to make sure you’re redeeming your rewards in the very best way.
But what if that’s just not your thing?
There are plenty of guides out there for those who want to maximize rewards cards. But this guide is for everyone else who wants to get the most value for the least effort.
Option 1 – Cash-Back Credit Cards
Examples of cards in this category:
- Chase Freedom
- Chase Freedom Unlimited
- Blue Cash cards from American Express
- Barclaycard CashForward
- Wells Fargo Cash Wise
- Discover it
Miles and points can be nebulous – how much they’re worth varies by how you redeem them. An airline mile, for example, could be worth 5 cents (or more) or half a cent, depending on your luck in finding high-cost rewards seats that are redeemable for relatively few miles.
But that dollar bill in your pocket? You know exactly what it’s worth and how many it will take to get what you want to buy.
That is precisely the appeal of cash-back cards. Your card will clearly state how much you’re getting back on your spending.
It’s pretty easy to find cards these days that get you 1 percent or 1.5 percent cash back on everything and/or 2 percent, 3 percent, 4 percent and even 5 percent in certain spending categories. And the rewards you’ve accrued will have a dollar amount attached to them.
Cash out your balance at face value for a deposit into a bank account, or for a statement credit off your credit card bill.
If you have $261 in your rewards account, it’s worth $261 (although some cards will also kick in a small redemption bonus). Simple.
The other thing cash-back cards have going for them is that you can often redeem for any amount, any time. Some cash-back cards will require you to redeem in certain increments or for a minimum amount, but plenty on the market don’t have such hurdles.
So, instead of trying to figure out what to do with 10,000 airline miles (which generally isn’t quite enough for even a one-way ticket) and waiting around until you have “enough” for a flight, you can just redeem however much cash back you’ve earned (even if it’s just $10) for a statement credit.
That’s probably why 2016 research from card-processing company TSYS found that 30 percent of consumers redeem their cash-back rewards a few times a year, but just 12 percent redeem their travel rewards that often.
True, you might be able to squeeze more value from your spending by earning points and miles and redeeming them strategically, while the value of your cash back will always be stuck at its face value.
However, with points and miles, you risk getting a dismal value or not being able to use them when you want to – and it takes research, patience, and experience to ensure that doesn’t happen.
Cash back, however, is basically impossible to mess up. Spend with your card, earn cash back and cash it in whenever.
Option 2 – Generic Travel “Miles” Cards
Examples of cards in this category:
- Capital One Venture Miles Rewards card
- Discover it Miles card
- Barclaycard Arrival Plus World Elite MasterCard
Generic travel rewards cards take the cash-back model and adapt it for travelers. While they may call their rewards currency “miles,” these aren’t traditional miles tied to a particular airline.
Instead, you’ll earn “points” or “miles” that are worth a fixed amount. When you look at your rewards balance, it will have a dollar value. And you can use that value to cancel out travel purchases you’ve already made.
If you don’t have enough “miles” to cover a travel purchase, you can often use them toward a part of the cost.
Some of these cards come with annual fees, but their rewards-earning rate tends to be a bit more than your run-of-the-mill cash-back card: 2 miles per dollar (worth $0.02) on all purchases, for example, for the Venture and Barclays’ Arrival Plus, which also has a 5% redemption bonus.
Compared to traditional airline miles, generic travel rewards cards require less effort and offer far more flexibility.
Instead of hunting for rewards seats on a specific carrier or rooms in a specific hotel, you just book the travel you want on the airline/hotel’s site or on aggregator sites like Expedia or Kayak and use your rewards to help cover the cost.
Depending on the generic travel rewards card you have, you can also often redeem toward tours, cruises and even taxi and bus fares.
So, if you decide not to take a flight or stay in a hotel for a while, don’t sweat it – you can use your “miles” for a taxi ride or your commute to work.
As with cash-back rewards, the value of your miles is capped (generally at 1 cent each). But the ability to redeem them in small amounts for a variety of options saves you from the planning and plotting required by more complicated rewards programs.
Why It’s OK to Be a Rewards Slacker
Low-effort cards don’t get the glory and detailed guides that reward-chaser darlings like the Chase Sapphire cards and the American Express Membership Rewards cards (which have nearly infinite rewards potential to unlock) do.
But, unless you’re so much of a slacker that you can’t be bothered to log in to your credit account and press a button to redeem, low-effort cards are a guaranteed way to get a kick-back on your spending with little effort.
They may not get you the most out of your spending – but you are practically guaranteed to get something.
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