What is the best rewards credit card for you?

CALGARY— Credit card rewards can deliver great payoffs, but sifting through the points systems, introductory offers, shifting loyalty programs and fine print can make deciding what to put in your wallet a daunting task.

Fortunately, you can at least narrow down the options in a few steps, said Janine White, vice-president of marketplaces at RateSupermarket.ca. The first step is an honest assessment of whether you’re having trouble paying off your bill every month, since cardholders who carry a balance should skip the rewards cards and find a low-interest option.

If you’ve got a handle on your finances, a good next step is to decide if you want a pointsbased card or straight cashback. More and more people are choosing the simplicity of cashback, said Mary-Anne Huestis, co-owner of financial research firm MarketSense Inc.

“Cashback is a pretty transparent category. It’s not too difficult to figure out where you’re going to end up based on your spend patterns at the end of the year.”

About 31 per cent of cardholders have a cashback card, compared with 13 per cent in 2006, said Huestis, as some customers have found that programs like travel points can be frustrating because of extra charges, needing more points than expected or a shortage of available flights.

For those who have become disillusioned with travel programs, especially after issues including Air Miles switching their expiry policy and Air Canada cutting ties with Aeroplan, there are an increasing number of competitive cashback cards that can offer similar rewards and insurance coverage to travel cards, said Huestis.

If the hundred dollars or more in annual fees is a worry, major banks also generally offer nofee cards with lower cashback percentages.

Customers should also consider how widely cards are accepted, since some merchants don’t accept premium feebased cards, such as American Express.