CREDIT CARDS Learn to earn the best reward

Navigating the world of credit-card rewards programs can be tough.
MARKETWATCH
SAN FRANCISCO -- Airline miles? Cash back? Hotel points? These days, choosing among rewards cards is not for the faint of heart. Not only is there a plethora of cards from which to choose -- how about money contributed to your IRA every time you make a purchase? -- but they offer perks in a variety of ways.
And they all come with the inevitable fine print detailing myriad restrictions, making it difficult to figure out which is the best deal.
There's some evidence rewards programs stymie cardholders. About one-third of mothers in a recent survey said they're unsure what rewards their credit card offers, according to a survey of 223 mothers with rewards cards, conducted by Harris Interactive for Disney Rewards Visa Card from Chase.
Forty-one percent of the moms said they're dissatisfied with their rewards-card program, 34 percent said their credit card does not offer the types of rewards their family wants and 32 percent are frustrated by the restrictions their card carries.
Cash back or credit?
Your first choice is whether you want to earn points for a particular goal, such as an airline ticket, or get cash back.
For some, the hassle of redeeming points is too much. "In general, I'm not a big fan of points cards, but there are exceptions," said Curtis Arnold, founder of CardRatings.com, a Web site for consumers to compare credit-card deals, based in Little Rock, Ark.
One such exception: The Hilton HHonors Platinum card from American Express, he said.
The card offers 10,000 points with your first purchase, up to 10,000 for your first four Hilton stays, plus five points for each dollar spent on eligible purchases at supermarkets, gas stations and elsewhere, and three points on other purchases. There's no annual fee. You get a free one-night stay by redeeming between 7,500 to 40,000 points, depending on the hotel.
But both Arnold and Bill Hardekopf, chief executive of LowCards.com, another comparison Web site, said they prefer cash-rebate cards, in part because they're easy to use.
Instead of figuring what your points are worth and how to redeem them, cash-back cards automatically add a rebate to your credit-card bill.
Consider the traditional airline card. "Some are advertising no blackout dates, no seating restrictions, but there's invariably restrictions somewhere," Arnold said. "And you've got the hassle of keeping track of your points and figuring out how many points am I going to need to accumulate to get a free ticket to this destination. And when you redeem, you typically have to pay a redemption fee, usually 15."
Shopper: Know thyself
To choose among the offers, you need to assess your buying habits, and then go to one of the comparison Web sites to check what's out there. If you're loyal to a hotel or airline, a branded card may be a good buy. Those who want more freedom should consider a card with rewards that are good at a variety of companies or a cash-back card.
If you're someone who hops on a flight at the sight of one "low fare!" alert, you might want a card with rewards spanning a variety of travel companies.
One new option: the Travelocity Rewards MasterCard, offered by Barclays Bank Delaware, good for travel booked on Travelocity. (Note: The annual fee is waived for a year but then you'll pay about 29 annually.)
If, instead, you seek unusual perks, consider a Visa Signature card (usually offered to households with annual income of 150,000 or more).
A variety of issuers offer this card with different rewards, but all come with Visa Signature's special offers, including tickets for two in Millionaire's Row to watch the Kentucky Derby, plus a tour of Churchill Downs, three nights hotel stay, and more -- for about 4,250 per couple.
Another option: 75 for two tickets to the NFL Draft event, including getting to "hand the hat" to an NFL draft pick, signaling to the draftee which team picked him.
Maybe you want to save for retirement? The Fidelity Investment Rewards card puts 75 into a Fidelity account every time you rack up 5,000 points.
Assessing which card is the best deal is no mean feat but, after you narrow your choices based on your consumer tendencies, do the math.
"You need to understand what you're getting yourself into," Arnold said.