How to Compare Credit Card Rewards Points

By Eliza Daglish on January 7, 2013

There are so many credit cards on the market that at times it can be difficult to choose exactly the right one for your needs. Let’s look at rewards points and see how we can improve comparison shopping by comparing rewards points cards to other cards.

Rewards Points Redemption

The most important part of rewards points is their value at redemption. In seclusion, there is nothing more valuable about getting 10 rewards points for each dollar you spend or 1 reward point for each dollar you spend. Rather, the value of rewards points at the time your redeem them is the most important part – 10 points worth 1/10th of a cent are worth just as much a 1 point worth 1 cent.

What you should focus on is the sliding scale of redemptions. Generally, credit card companies give your points more value when you redeem more of them at one time. For instance, a popular card from a credit union gives customers the ability to turn 15,000 rewards points into a $125 statement credit, basically $125 in cash. However, if the cardholder waits until he or she has 20,000 points, then these points can be redeemed for $200 in cash.

The difference is huge. Up to 15,000 in rewards points, points are worth less than one penny each. However, once the cardholder makes it to 20,000 points, rewards points are worth more than one penny each.

Always be sure to compare the different values at which credit card rewards points become most valuable. It will better help you understand when you should take your rewards, and which companies may be better than others based on their minimum redemption to get full points value.

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