Depending on the credit card and rewards program you choose, you can earn rewards points for each dollar you spend on the card.

You are then able to use (redeem) these points in various ways, according to the rules of the rewards scheme, such as exchanging them for a selected range of goods and services, or for discounts on such things as flights and accommodation.

Check whether the card caps (limits) the amount of rewards points you can earn, whether the rewards points can expire before you redeem them, and whether it is easy to redeem the points for the rewards you value.

Some providers allow you to set up auto-redemption, so that every time you reach a certain number of points, these points are automatically redeemed in the method of your choice.

There are four main types of credit card rewards:

• Cashback: These rewards may suit customers looking for cashback or cash equivalents such as gift cards.
• Merchandise (general rewards): These rewards may suit customers looking for multiple options when redeeming points, with potential choices for redemptions including gift cards, automotive services, entertainment, lifestyle, food and beverages, or additional rewards.
• Frequent flyer (flight rewards): These rewards may suit customers looking for flights or other travel products.
• Instant rewards: These rewards may suit customers looking for an instant discount at the point of sale.

To compare rewards credit cards, consider the following questions:

• What is the rewards program? Does the program suit your credit card usage habits? Does it offer rewards that you are interested in?

• How can you earn points? How many points can you earn per dollar spent? Are there any conditions or point caps? Do the rewards points expire?

• What is the cost of having the card? Is the card’s annual fee worth the amount of rewards you can earn? Are there any costs associated with being a member of the rewards program? What is the interest rate?

• Are there any other features on offer? Some rewards credit cards also offer extra perks like complimentary travel insurance, purchase protection insurance and lounge access.

Canstar can also help narrow down your options. You can use the table at the top of the page to compare rewards credit cards, and change the filters to suit your requirements. Canstar researches and rates credit cards from a range of providers. When comparing rewards credit cards we consider both the price and features on offer, including the net reward return that customers can get.

Some potential benefits of having a rewards credit card are:

• Earning points. The main benefit of a rewards credit card is that you can earn rewards points on your eligible spending. These points can be redeemed for things like cashback, frequent flyer points, merchandise and discounts on your shopping.
• Extra features. Rewards credit cards can often come with extra features like complimentary insurance cover.
• Bonus offers. Rewards credit cards may offer bonus rewards points for new customers when they spend a certain amount within the first few months of having the card.

Most everyday purchases will be eligible purchases. But there are certain transactions that won’t be eligible, as determined by the credit card provider. Common exclusions include interest, fees and charges, BPAY transactions, cash advances, balance transfers, government-related charges and gambling-related purchases.

The exact process will depend on your credit card provider. But generally, you can redeem your credit card rewards points by logging into your account, going to the rewards section and following the prompts.

Whether or not rewards credit cards are worth it depends on how you use your credit card. Rewards credit cards typically charge higher annual fees and interest rates than non-rewards cards. So before applying for one, you should make sure that the rewards you earn are worth enough to justify this higher cost.

If you use your credit card a lot and pay off your balance each month, it may be worthwhile. But if you do carry a balance on your card, you’ll likely spend more in interest than you would gain in rewards.