Pointshogger

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Understanding Credit Cards

There are essentially 4 types of credit cards that earns some sort of rewards. They are: fixed value, transferable points, co-branded and pure cash back. This post will explain the differences between each type.


Fixed Value Credit Cards

This is when you earn points at a fixed rated where you know how much you are going to earn and you know exactly what you are getting in return when you redeem your points. For example, the Capital One Aspire Travel World Elite MasterCard earns 2 points for every $1 spent on all purchases. Two points is worth 2 cents when you redeem for travel related expenses. These types of cards are good for flexibility to book cheaper flights. They are not good to use to purchase business class or first class flights.

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Transferable Points Credit Cards

These types of points allow you to accumulate points into a central pool and gives you the flexibility to transfer your points to different partners. For example, the American Express Membership Rewards program, which is my favourite rewards program, gives you the option to transfer to different airlines and hotels programs. The key with these programs is to watch for transfer bonuses, which the RBC Avion program is pretty good at.

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Co-branded Credit Cards

These credit cards allow you to earn points of a specific airline, hotel or other type of loyalty program directly. I would note that some loyalty programs also have the flexibility to transfer points to another loyalty program. For example, the American Express Starwood Preferred Guest Credit Card allows you to earn Starpoints, which is one of the best transferable hotel programs out there that allows you to transfer their points to 30 different airline programs.

Also, these types of credit cards are usually associated with perks such as: free checked bags, free hotel night, priority check-in, lounge access, and companion passes.

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Pure Cash Back

These types of credit cards allow you to earn pure cash back that is either credited directly onto your monthly statement or a cheque is mailed to you.

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Pointshogger aims to provide analysis and updates on earning loyalty reward points and maximizing the value of your points. We hope to inspire our readers to experience the joy of travel and make the most out of what they've already got!

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