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Who has the best rewards?

by SuperiorInvest

Credit Cards it can offer more than just comfort; they can also be a tool for earning valuable reward points.

According to a 2017 national survey 40% of credit card users reported rewards a cash back were their favorite benefits of the card they used the most. 62 percent of cardholders ages 27 to 36 chose rewards and cash back as their top features. Another survey of national payments found that Americans are increasingly using credit cards for smaller purchases. In this survey, 17% of respondents said they routinely use credit cards to pay for purchases of $5 or less.

Whether you stick to using a credit card for big purchases or small purchases, you want to make sure you’re getting the most rewards for each purchase. With so many different cards to choose from, however, finding the card with the best rewards program can be difficult. Keep reading to find out how the rewards from the three biggest credit card issuers vary.

Investopedia / Amelia Manley

Credit card rewards points go against each other

American Express, Chase and Citi are the three biggest players in the credit card scene. All three offer rewards programs, but there are subtle differences that are worth understanding. Knowing the finer points of each program can help you choose the one that has the best rewards for your spending style.

American Express Membership Rewards

Membership Rewards® Program from American Express (AXP) offers a number of opportunities to redeem bonus points earned with an eligible American Express credit card. For example, you can use your points to book travel through American Express Travel. Your Rewards Points can be redeemed for part or all of the cost of flights, prepaid hotel stays, vacations and cruise bookings. The payout value of each point varies based on how you use them.

For example, when you pay points for flights through American Express Travel, every 10,000 points is worth $100 toward your ticket. Each point is worth one cent. On the other hand, if you book a cruise, 10,000 points equals a redemption value of $70. In that case, each point is worth one-seventh of a cent. Resolution is important to getting the most mileage out of your points.

Transfer Membership Rewards® points to participating airline and hotel frequent flyer programs such as Delta SkyMiles, British Airways Executive Club, Hilton Honors™ and the Hilton Honors program. Points do not transfer on a 1:1 basis for each program. For example, 1,000 Membership Rewards® points equals 1,000 SkyMiles if you need to catch a flight, but if you book a HIlton hotel, they are worth 2,000 Hilton Honors points.

Points can be redeemed for purchases at partner merchants such as Amazon.com and BestBuy.com, as well as tickets to select entertainment events, charitable donationsand even catch a taxi in New York. They can also be redeemed gift cards to partner brands like Airbnb, Uber and HomeChef, as well as a long list of retailers and restaurants. Points can be redeemed for statement credit, but not for cash. When redeemed for statement credit, each point is worth six-tenths of a cent. Be aware that the type of card you have can affect the value of points.

To see an in-depth review of Amex’s Membership Rewards program, check out ours complete program guide.

Citi Thank you

Participate in Citigroup’s (C) Citi ThankYou program, you will have to participate Citi credit card. Once you’ve signed up to an eligible card account and are collecting points, you can use your rewards in a number of ways.

Like Membership Rewards®, Citi ThankYou members can redeem points for travel. Points can be redeemed for flights, hotel stays, car rentals, vacation packages and cruises booked directly through the Citi Travel Center. The value of loyalty points varies based on how they are used and even what types of Citi credit cards are used. For example, if you book flights with JetBlue Trueblue, your points will transfer 1:1 if you use a Prestige or Citi Premier credit card. But if you book your flight using Citi ThankYou Preferred, Citi Rewards+, Sears Mastercard or Citi Double Cash, then 1,000 points will only be worth 800 Trueblue points.

ThankYou points can also be transferred to a number of airline and hotel partners, including Virgin Atlantic Flying Club, Emirates Skywards and Wyndam Rewards. Again, points do not always transfer on a 1:1 basis. As with JetBlue’s TrueBlue, depending on the Citi card used, you can redeem 1,000 ThankYou points for 1,500 or 2,000 Choice Privileges Rewards points, while Wyndam rewards can be redeemed for either 1,000 or 800 points. You’ll need to carefully compare the transfer options to see which one offers the most bang for your buck.

Gift cards, purchases, statement of credit, charitable donations and cash are other available redemption options. Note that your point value may vary depending on what type of reward is paid or what type of Citi account is used to make the purchase.

Chase Ultimate Rewards

Ultimate Rewards Program from JP Morgan Chase (JPM) applies to participating Chase credit cards. Members can redeem points for travel, including flights, hotels, cruises and car rentals. Chase offers a unique feature that provides Ultimate Rewards members with greater value compared to other profiled rewards programs.

Depending on the Chase card, when you book travel through the Ultimate Rewards portal, you’ll get a bonus point value upon redemption. The Sapphire Reserve Card receives a 50% points bonus when redeeming for travel, while the Sapphire Preferred Card only received a 25% bonus. Ordinarily, the point redemption value would convert to one cent for each point. So 50,000 points would be worth $500 in redemption value. With a 50% points bonus, you’d get $750 in travel value, bringing the value of each point to 1.50 cents. With the Sapphire Preferred, you’d get $625 in travel value, or 1.25 cents per point.

Rewards cards, like the Sapphire series, also offer 1:1 point transfers to participating hotel and airline loyalty programs. These partners include Southwest Airlines Rapid Rewards, United MileagePlus, Marriott Rewards and IHG Rewards Club. These options are different than some you’ll have access to through American Express or Citi. The value of points can range from 1 cent to 1.50 cents depending on which card you use.

In addition to travel, you can also redeem Ultimate Rewards points for items at the Ultimate Rewards Mall or for gift cards and cash. Compared to American Express, you get slightly better value for paying off your statement credit. Each point is worth one cent when redeemed for cash back or statement credit, which is 40% more than American Express offers. The number of points—and corresponding value—required to redeem for gift cards or merchandise varies depending on the card or item you’re applying rewards to.

For a more detailed guide to the Chase rewards platform, check out our page Ultimate Guide to Chase Ultimate Rewards.

Bottom Line

Ultimately, picking a winner depends on what you’re looking for in a rewards card. Finding a card that optimally rewards your spending patterns is certainly an important factor. And if it’s a big one-time bonus, all three programs have cards offering new account bonuses of 60,000 points or more. Even if you’re willing to pay the hefty annual fee ($695), the Amex Platinum card currently earns you a 100,000 point bonus after you spend $6,000 in the first six months of account membership.

Comparing the program’s relative payout options and their associated value is another indicator you can use to gauge the quality of each card’s rewards. For example, if you want to be able to transfer your points to a loyalty program, you’ll need to look at the airlines that each card issuer partners with. Generally, you get the most out of your rewards when you redeem them for travel; changing them to cash or a credit statement is likely to bring the least value. A full picture of the pros and cons of each program can help you narrow down your final choice.

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