Rewards 101

If you’re new to credit card rewards, there are three things you need to know for choosing the right card: 1) How to Earn Points 2) What Points are Worth, and 3) How to Spend Points.

How to Earn Points

The two most important things to consider for earning points through a credit card are the sign up bonus and the rate at which you earn points through credit card spending.

  1. Sign Up Bonus – A credit card sign up bonus is one of the quickest and easiest ways to earn lots of points, which can be used towards your next Disney vacation. Most cards offer points after spending a prescribed amount of money on the card in a certain amount of time. For example, it could be something like 50,000 points after spending $4,000 in the first three months. Some cards also offer additional points for adding an authorized user like a spouse. The terms are not usually complicated, but you want to make sure you understand and complete them to receive the sign up bonus.
  2. Credit Card Spending – Many credit cards offer a base number of points, often one point, for your everyday purchases and multiple points for certain categories like dining, travel, gas, etc. Don’t get hypnotized by these category bonuses. The vast majority of your points, 75% or more in most cases, will be non-bonus spending. Focus on the value you’ll get from everyday spending, which you can calculate by multiplying the number of points you get for everyday spending by the value of a point. We’ll cover the value of a point in the next section.
  • Honorable Mention – Less important, but worth mentioning, are a couple other ways to earn points or value from a card. Some cards offer additional perks like an annual bonus if you keep the card, a spending bonus if you spend certain amounts in a period of time, or status at a hotel for instance. In most cases they don’t have substantial value, but can be icing on the cake.

What Points are Worth

This is perhaps the most important concept for someone who is new to credit card rewards. Many people assume that a point in one program is probably worth about as much as one in another program. The truth is that one point can be worth five times as much as another. This can make a huge difference in the value of a sign up bonus and the value you can get from your everyday purchases.

Ultimately, how much a point is worth fluctuates based on how you redeem it. We’ve put together some basic points valuations based on some of the solid redemption options at Disney World or Disneyland to help you get a rough idea of the value you’re likely to get from a credit card.

Rewards ProgramValue Per Point (cents)
Marriott 0.8
IHG 0.5 
Wyndham 1.3 
Starwood 2.4 
British Airways1.5 
Chase Ultimate Rewards 2.0 
Citi ThankYou 1.3 
Southwest Airlines 1.5 

How can I spend points?

In any rewards program, you’ll have many ways to spend your points; some of them are great values and some not so much. We’ve tried to highlight some of the solid redemption options for you on this website.

But, the redemption options aren’t limited to which hotel you stay at or which flight you book. Many cards allow you to transfer points to other programs, redeem for cash or redeem for general travel expenses. Flexibility gives you options, which means you won’t get stuck with a bad redemption. Here are some of the options you can find on some of the more flexible cards:

  • Direct Redemptions – This is the most obvious use. An example would be redeeming Hyatt points to stay at a Hyatt property.
  • Indirect Redemptions – In some cases, you can redeem points in a program for a partner program. An example would be redeeming British Airways Avios for flights on American Airlines or Alaska Air.
  • Transfer Points – Some cards allow you transfer points into other programs. The Starwood Amex, for instance, allows you to redeem points for Starwood hotels stays or transfer points into dozens of airlines.
  • Redeem for General Travel – Chase Ultimate Rewards, for example, allows you to redeem points at rates up to 1.5 cents per point for all kinds of travel options through their respective travel centers.
  • Cash – Some programs like the two just mentioned will allow you to redeem points for cash, often a rate of one cent per point. Other credit cards like Citi DoubleCash simply earn cash rather than points.

A program that offers flexible redemption options increases your odds of getting solid value out of your points.


In summary, if you know the value of points in a program, know how you can redeem them, and give an extra look at cards with flexible redemption options, you’ll pick a great card. If you want to see some of our favorite ways to spend points and the cards that go with them, take a look at our Top 10.