Previously we discussed things to consider when comparing balance transfer credit cards. Let’s pick up the series this week by looking at considerations when comparing a different group of credit cards: rewards credit cards.

Rewards are one reason credit cards are so popular. After all, who wouldn’t like getting paid (or getting merchandise, or getting travel perks) just for spending the money they would have spent anyway? Rewards cards are great for giving something back when you use them. How do you choose the right rewards card for you though?

Here are some different aspects of rewards cards you should consider when comparing them:

1. Types of Rewards

Different rewards credit cards offer different types of rewards programmes. For example, some offer cash back. Others offer shopping vouchers and merchandise. Then there are rewards cards that specialise in a specific reward type like frequent flyer points with the Qantas American Express Classic credit card. There are even rewards credit cards that give you a great deal of freedom in choosing your rewards (from all of the options already mentioned).

What kinds of rewards have the most value to you? That’s an important consideration when comparing these types of credit cards. Think about it. What’s the point of having a rewards card that has an emphasis on shopping vouchers to a particular retailer (like the David Jones American Express card) if you don’t already shop there?

2. Reward Points Expiration and Caps

Are you a big spender who has the potential to earn quite a bit of rewards through a rewards credit card? If so, you’ll want to carefully compare things like expiration periods and caps on the points you earn. If the card only offers rewards points on a set spending limit, but you plan to spend more, you would be better off going with a no-cap rewards card like the Velocity NAB credit card. If you don’t plan to redeem your points quickly (perhaps you’re not such a big spender and you need more time to accrue your point balance), finding a card with no point expiration would be an important factor in your decision.

3. Ability to Earn Rewards Points

Another important consideration when comparing rewards credit cards is how many points you’ll actually earn per dollar spent. This is a pretty variable number. For example, you’ll need to spend $2 to earn one reward point with the American Express Gold Ascent card, whereas the CUA Rewards credit card lets you earn one point for every dollar spent. You basically earn twice as many points for spending the same amount of money with the second card.

That’s an oversimplified look at rewards point earnings though. Remember, you also have to consider things such as how many points you need to earn to redeem them for similar perks (it doesn’t matter if you earn twice as many points per dollar spent if you need three times as many points with that card to actually redeem them for what you want).

These are by no means the only considerations when choosing rewards cards. When you compare two or more of these credit cards, you’ll also want to look at perks beyond the rewards programme itself (like free international travel insurance or purchase cover) as well as more typical considerations like interest rates and annual fees. It’s only when you look at all of these factors together that you’ll be able to make a well-rounded comparison and choose the best rewards card for your situation.