There are two basic types of reward credit cards; those that offer rewards from the bank, also called bank rewards, and those that feature points or miles from a third party such as an airline or hotel chain. Although finding the most value in points and miles from airlines and hotels is a challenge for cardholders and non-cardholders alike, utilizing a card that offers bank rewards is a problem unique to those who have these accounts.

1. Choosing the less valuable bank rewards
Most of these bank rewards programs offer rewards in the form of gift cards, merchandise, or cash back.
While cash back might appear to be the most valuable reward, the rate of return can be much lower than other options. For example, the American Express Membership Rewards program offers a variety of gift cards and merchandise at the rate of 1 penny per point, yet cash back rewards only return a half cent per point redeemed. That is a huge difference.

2. Ignoring point transfer options
Some of the major bank rewards programs offer the option of booking travel directly, transferring points to miles with airlines.

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