Are Credit Card Rewards Worth it?

You probably heard on the news, how Canadians are racking up more debt than ever before. So the question remains, are credit card rewards worth it? The short answer depends on a few factors.

Are you paying off the balances in full each month?

If you are not paying off your credit card balances in full every month, then the credit card rewards are NOT worth it. If you rack up any amount of interest, even the low 1.99% interest, a 2% return on rewards only gets you 0.01% ahead. The point is, if the interest is higher than the reward that you earn, then the reward is not worth it.

Unfortunately it is true, when you do hear stories of people accumulating millions of miles and points, it is because they have the available cash flow to keep up with bill payments on time, so that they do not incur any interest.

Are you paying an annual fee?

Let’s say a standard annual fee is $99 or $120 dollars per year. The question is, are you getting more value from the annual fee than if you were not paying it. This is a more subjective question, as you would need to compare a no annual fee credit card against the specific annual fee card that you want to get. The idea is, only pay the annual fee on a credit card if I can get more value, than the fee, out of it. Value can include benefits and perks, sign up bonuses, multiplier bonuses, etc.

Free travel has never been my goal of collecting points and miles. Instead, they helped me to lower the cost of my family’s travel. By redeeming points, I was able to save on flights and hotels, therefore able to spend more on activities and food. Recently, during our Christmas trip to Florida, we took the girls for an incredible evening of fine dining experience at the award-wining Victoria & Albert’s restaurant located inside Disney’s Grand Floridian Resort. It was by far the most expensive dinner we ever had, much more than our $1,000 dinner for two at French Laundry, and it was worth every penny!

You may find first year fee waived promotions, or even if you do pay the first year annual fee, it may come with a sign up bonus worth more than the fee. However, the question becomes more sensitive the second year, when there is not fee waiver or sign up bonus. This is where I have always wished to see more incentives offered beyond the first year to encourage more people to keep their credit card and continue paying the annual fees to create more loyalty.

Are you able to redeem the rewards?

Miles and points are pretty much a currency. The key is cash out to get any value. If you are unable to redeem miles and points, or have no interest in doing so, then you are better off going for cash back credit cards that generally give you a credit statement against your balance. Cash back may not be as lucrative in some times, because of the lack of sign up bonuses, but the return is fixed, so it is predictable.


Credit card rewards may or may not be worth it, it highly depends on your personal situation. As I usually say, do the calculations for your personal situation before going ahead with a credit card rewards strategy.

Happy Pointshogging!


  1. Thanks for the tips, Captain Obvious. I’m grateful you attended university to acquire a higher education in order to share this profound revelation that us simpletons would never have been able to extrapolate on our own.

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