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7 things worth knowing about reward credit cards

This has truly been a golden era for credit card rewards programs. Card issuers have been dangling rich offers of points, miles, and cash back in the quest to improve profit. More than 60 percent of credit card offers include some type of reward, said Brian Riley, at the consulting firm CEB TowerGroup. But the size of some of the biggest incentives ever is what has titillated rewards program junkies. Airlines have offered as much as 100,000 miles when customers spend a certain amount on their new cards, for instance, and bank cards have offered $200 cash back for spending $500.

‘‘There are millions and millions of points and miles out there for free, basically,’’ said Brian Kelly, founder of the advice site ThePointsGuy.com. ‘‘You just have to figure out what you want and go after it.’’ Keep in mind that:

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■   They’re not rewards if you carry a balance. All you’ll do is help subsidize the program with the interest you pay. These cards already carry interest rates that are higher than average. Keep an eye on fees, too. Plenty of rewards cards come without annual fees, so shop around.

■   Watch for sign-up bonuses. Bonus points can increase your rewards quickly, although minimum spending requirements have made it difficult to bag them just for signing up for a card.

■  Paying with points is getting easier. he days of having no option but to sit on points until you accumulate a desired amount are over. You can pay with points at more of retail sites. It’s also possible to pay for part of a purchase with points and the rest with a credit or debit card.

■  Transferable points can help you score faster. Three of the best rewards programs with transferable points are American Express Membership Rewards, Chase Ultimate Awards, and the Starwood Preferred Guest hotel program.

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■   Airline cards compensate with perks. The downside to airline cards is you put all your miles in one program. But what you give up in flexibility, you gain in perks. Carriers grant lounge access, allow priority boarding, and waive baggage fees, for example.

■   Offers are getting more innovative. Citi and American Airlines are cosponsoring concerts by Alicia Keys and Maroon 5 in New York and Los Angeles for customers with the Citi/AAdvantage card. Others can get a chance to interact with musicians, athletes, and chefs, sometimes for free, as part of the Citi Private Pass program. Chase Sapphire Preferred cardholders can use their points to get behind-the-scenes access at the Sundance Film Festival or a walk-on role with the Radio City Christmas Spectacular.

By the way — if you’re looking for a shortcut way to calculate the value of your points, good luck. They vary not only offer to offer, but sometimes month to month. A rewards program may offer you 5 percent cash back at a gas station one month and 1 percent back the next.


Dave Carpenter writes for the Associated Press.