Are travel point / reward credit cards worth the hassle and cost?

Question

Are travel point / reward credit cards worth the hassle and cost? Many such cards have fees, and when you try to book there are often restrictions. What has your experience been with these types of cards? How best to use them effectively, if at all?

6-Dec-09 / Any more opinions? Bounty added!

Answer 1

A lot of whether or not using those types of cards is worth it depends on how you use your credit card. If you use your credit card very often and pay it off in full each month, then often these cards can be great for you. If you often leave a balance on the card then a card with a lower interest rate would be better to focus on. I personally would not use any points card that had any actual fees with it. They already typically have a below average interest rate as it is.

For us, we very rarely use our credit card. For utilities we use e-checks and for most other things we use a cash budgeting system. As a result, for us the lower interest credit cards are more important since we rarely would gain any worthwhile amounts of points for use.

Answer 2

I think anything short of cash isn't worth it. Cash has the immutable property of being able to buy and pay for anything. Why lock yourself into a single option for spending.

The following are my personal criteria for using cash back cards.

1. Can I pay it off each month? If no, then I don't need a card
2. How often do I get cash, and how do I get that cash? (Yearly or monthly, as a check or some other method...)
3. Are there any fees? If there are fees that I don't need that card.

If the card meets those three criteria then I can safely use it. I personally use a card for all my purchases (never ever a debit card) because I can pay it off each month. This is a dangerous tightrope I walk, and it can (and has) get me into real trouble.

In your case, so long as there are no fees and you can pay off the card, get a cash back offer as your best bet.