Get the most for your credit card reward points

File photo: American airlines plane in Houston

April 25, 2011 3:32:31 PM PDT
Millions of people who use credit cards earn reward points for every charge they make. Besides airline tickets, you can get merchandise, hotels or even tickets to the rodeo. We found which purchases are worth the most.

That flat-screen television may look like a great way to cash in your reward points, but after crunching the numbers, Consumer Reports says many rewards are not worth your points.

Dawn Dankner-Rosen keeps track of the reward points she gets on her credit card so that she can book free flights. With six people in her family, she says she has saved thousands of dollars.

"We've gone to California. We've gone to France and Spain and Italy. So we've gone all over the world using our, our miles," she said.

But are plane tickets the best way to spend those miles and reward points? You can get computers, TVs and even furniture and mattresses.

"Hands down, the best value for your miles is an airline ticket. The way we calculated the value is to compare the miles you spend to the actual cost of the item," said Chris Fichera with Consumer Reports.

For instance, the average price of a domestic flight is about $350. If you divide that by the 25,000 points it can take to get a ticket, each mile is worth about 1.4 cents.

Even if you have to use 35,000 points, the value of the mile is still a penny.

"Buying merchandise with points or miles is generally a worse deal. One flat-screen TV we looked at cost more than 78,000 points," Fichera said.

A TV like that retails for around $400 dollars. Divide that by 78,000 and the points are only worth about half a cent.

For hotel stays, using points may be worth it. But you've got to do the math because deals vary.

And while air travel is the best way to spend your miles, airlines don't always make it easy with blackout dates and other restrictions.

Dankner-Rosen says you have to be persistent and flexible. With a little effort, she's managed to book a trip for the whole family to China this summer.

"It's a way to, to bring everybody together," she said. "We have unbelievable memories. It's golden."

Consumer Reports money adviser says if you have just a few miles you'd like to use up, some of the best deals for small transactions are newspaper or magazine subscriptions.

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