Maximizing your credit reward points

April 12, 2011 8:26:24 PM PDT
Millions of people who use credit cards earn reward points for every charge they make. In addition to airline tickets, you can get merchandise, hotels, even tickets to the rodeo! What's the best way to spend your points? Consumer Reports Money Adviser says that the best value by far is to get an airline ticket. Consumer Reports Money Adviser calculated the value by comparing the miles you spend to the actual cost of the item.

For instance, the average price of a domestic flight is about $350. That divided by the 25,000 miles it can take to get a ticket, and each mile is worth about 1.4 cents. Even if you have to use 35,000 miles, the value of the mile is still a penny.

Buying merchandise with points or miles is generally a worse deal. A flat-screen TV that Consumer Reports looked at cost more than 78,000 points. A TV like that retails for around $400. So dividing 78,000 by 400 means the points are only worth about half a cent.

For hotel stays, Consumer Reports says 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.

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.

Consumer Reports has no commercial relationship with any advertiser or sponsor appearing on this Web site.