Among the major reward cards out there is the family of cards offered by Bank of America that allow you to earn credits in their own proprietary reward points system called WorldPoints.

Pro: Flexibility

The WorldPoints program seems to have been created for maximum flexibility. Their website boasts of the many ways that WorldPoints can be redeemed, such as for cash, travel, gift cards, and merchandise. With all of these options, one must carefully consider how to redeem WorldPoints in order to maximize their value, and ultimately, when to use your Bank of America card instead of another.

The Value Equation

For cash, the value of your reward is always easy to determine. Almost all purchases earn 1 WorldPoint per dollar spent, while purchase made at certain online merchants in their WorldPoints Mall will earn up to 10 points per dollar spent. Bank of America WorldPoints can be redeemed for cash only in various amounts. After you earn 5,000 WorldPoints, you may redeem them for a $25 check, a mere .5 cents/point. The rate of return gradually goes up to 1 cent per WorldPoint when you redeem 25,000 points or more.

As for travel, their website advertises that “25,000 = Fly anywhere in the continental 48 states,” however careful observers will read the fine print under the Reward Details page. The details are that you may redeem the award for travel in the lower 48, but only if the ticket does not exceed their “maximum dollar value” or MDV of $400. So basically, you can redeem your points for any ticket that would give you up to a 1.6 cents per point value. This is better than their cash reward, but not as good a value as most domestic airline program awards that do not have a dollar value limit. With today’s soaring airline prices, $400 is going less and less further than it once did. Devaluing this reward further are the restrictions imposed that require a 21 day advance purchase, and travel stay minimums and maximums on international redemptions. Needless to say, if you purchase tickets with cash, there are no inherent restrictions.

As for gift cards and merchandise rewards, while there are many options, it seems the value in cents per point is almost always less than 1 cent.

When Should You Use Your WorldPoints Card

You should definitely look through the WorldPoints Mall for opportunities to earn more than 1 point per dollar, what many cash back cards offer. All of these value comparisons are based on everyday purchases that only earn 1 point per dollar, however there are many well known national brands that can earn much more. At 1 point per dollar, few of the rewards are exceptionally good values, however, if you focus your WorldPoint Card spending in their online mall, you may enhance your value per dollar spend considerably. When it comes time to redeem, airline redemptions are generally a better value than their cash awards, with merchandise and gift cards bringing up the rear.

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This entry was posted on Monday, September 22nd, 2008 at 23:12 and is filed under Maximize your Credit Card Rewards. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.