Jul. 20--Struggling U.S. airlines continue to make frequent-flier programs less attractive, which means that if you have an airline rewards credit card, this might be the time to start using a cash-back card instead.
     Some airlines have announced they will charge larger fees to cash in frequent-flier miles. And they're cutting flights, which might make it harder to use miles. Experts also believe major carriers will start requiring fliers to cash in more points for free flights. So if you have miles, consider using them sooner, rather than later. And if you have a credit card that earns frequent-flier miles, you might want to change your rewards currency.
     "Airline reward cards are the dinosaurs of the rewards-card market," said Curtis Arnold, founder of CardRatings.com and author of the new book, "How You Can Profit from Credit Cards."
     In choosing any credit card, the primary question is: Will you carry a balance? If so, get the lowest interest rate you can and pay off the balance. Forget rewards cards, which typically have higher interest rates.
     But if you pay your credit card bill in full every month, you probably want a rewards card. There's something alluring about getting something for nothing.
     Assuming you have a high enough credit score to qualify for rewards cards, here's how to choose:
     Go online. Several Web sites will help you choose a rewards card. Among them are CardRatings.com, IndexCreditCards.com and LowCards.com. Also, watch your mailbox. Some issuers offer card deals directly by mail.
     Prefer cash. You can use cash anywhere, which makes it a superior currency to airline miles, merchandise points, gift cards and other rewards. It's irrational to choose any other rewards unless you're receiving a premium, more than cash value for the same amount of spending.
     Cash programs are simple to understand and use, unlike navigating frequent-flier programs and figuring out how to use points to buy merchandise from a catalog. And card issuers can't arbitrarily devalue cash like they can with points and miles by requiring more units to purchase the same rewards.
     So make sure you have a good reason to choose anything but a cash-back reward. "From so many different perspectives, cash-back cards are king," Arnold said.
     Get more than 1 percent back. You can do better than a cash rebate of 1 percent on all your purchases. Many cards offer 2 percent to 5 percent on certain types of purchases, such as gasoline and groceries, and 1 percent on everything else.
     Consider other factors. Generally, look for a card with no annual fee, automatic rewards payments and no reward limit. Look for a bonus reward for signing up, but don't become enamored with introductory offers that expire after a few months, said Justin McHenry of IndexCreditCards.com. If you choose an American Express or Discover card as your primary card, you'll need a rewards Visa or MasterCard backup because they are accepted in more places. As tie-breakers, evaluate the fringe benefits of cards. Examples are extending the manufacturer's warranty on anything purchased with the card, offering car-rental insurance and lost-luggage reimbursement.
     A card for big spenders. If you can charge tens of thousands of dollars a year on a card, the American Express Blue Cash card has been a consistently great choice for years. It is often rated as the best rewards card if you can charge a lot, well over $1,000 a month. With a tiered reward system, bigger cash rebates kick in after charging $6,500. Details are at http://www.AmericanExpress.com .
     A card for small spenders. There's no clear choice for smaller spenders. Find a card that gives you at least 1 percent right away, gives you the most rewards for your spending patterns and will cut a check or credit your account at $25 or $50 increments. The Chase Freedom Visa Signature card gives 3 percent back on the three categories where you spend the most money and 1 percent on everything else. Details are at http://www.Chase.com .
     Gregory Karp is a personal finance writer for The Morning Call, and author of "Living Rich by Spending Smart." E-mail him at yourmoney@tribune.com.


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