So you’ve decided that you want a new credit card and have been looking around the financial market to see what is available for you. If you’re having a little trouble choosing between the various cards then you’re not alone. Consumers face a major challenge because a high percentage of credit cards now offer rewards. The offers come in a variety of guises, from reward points and cashback to AirMiles, and all sound appealing.

The idea is that reward cards have a certain value. The more you spend on them the more points or miles you earn. The number of points or miles awarded per dollar depends largely on the provider. Some offer low rewards throughout but others might provide an introductory bonus for the first three or so months. They all work the same in principle but the value of the points or miles depends on you.

The truth is though that not all of these offers will suit you. They don’t suit three quarters of the people that have opted to have those cards in the past. For example, in the last three months alone only a third of all people with reward credit cards have actually redeemed points or miles, and 50 percent of them don’t make the most of them. So what is best, points or miles?

Air Miles

Air Miles offer much better value than they used to. For example, if you wanted to take a trip around the world then you would’ve had to use 529 miles to get a flight from London to Paris. Not anymore though. Now you’d only have to use 400. This applies to a lot of flights because people just weren’t redeeming their miles. This is one of the major advantages of Air Miles, but there are disadvantages.

Certain credit cards are partners with one airline only so you have no choice but to fly with them. As we all know though, one airline won’t cover the entire globe so you would be restricted as to where you could fly to under the miles scheme. If you don’t fly, on the other hand, then you get no reward at all. Air Miles can’t be traded for something else. You’re stuck with them. If you don’t fly then an Air Miles card would be useless.

Reward Points

Reward points are awarded in the same way as Air Miles but do offer a little more flexibility. You earn them as you spend, but schemes vary wildly. The general idea is that a specific store or group of stores offer rewards based on your spending and you can then redeem the points and spend them in that store or stores. As you know where you shop, you can choose a credit card that offers loyalty points for your favorite stores.

On the other hand, some loyalty schemes don’t allow you to redeem them whenever you like. They tend to send you through vouchers every quarter. You can spend them as you like then. The problem is that if you don’t accrue enough points for a voucher then you might not get one for six months or so. If you’re not getting the rewards then you have to question whether it’s really worth it.

Both miles and points have their advantages and disadvantages but it really all comes down to which one would offer better value for you. If you’re a frequent flyer then miles might be better but if you don’t then points would be the more viable option. No matter what you choose though, make sure that you find out how to use the scheme to your best advantage. If you don’t so that then there’s no point anyway!