Rewards card squeeze: time to review your options

Dear Liz: Could you please write about the way credit card companies are trashing their frequent flier programs? I have plenty of points from vendors but now find them worthless.

Answer: Credit card rewards programs usually get watered down over time, but that trend seems to be accelerating as card issuers look for new ways to contain costs and boost profits.

Typically, a card issuer will announce a generous new program and eventually tweak the rules to make miles, points or rebates harder to earn. At the same time, an affiliated airline — reacting in part to all the frequent flier miles being earned by the credit card customers — will increase the number of miles needed for a free flight or limit the number of free seats, making it harder to cash in rewards.

As issuers face high default rates and limits on their ability to raise interest rates, some are responding by weakening their rewards programs, raising annual fees or adding new fees, credit card experts say.

That makes it a good time to review your credit card programs to see whether they’re a good match for how you earn and use rewards.

Plenty of people do manage to fly for free using these programs, but they tend to work best for people who either charge a lot (so they quickly earn rewards) or people who fly a lot, since elite frequent fliers, or those who travel more than 25,000 miles a year with a single airline, usually have an easier time redeeming rewards.

You may be able to make rewards worthwhile simply by concentrating your flying with a single airline and its partners. Having miles scattered in a bunch of different programs makes it harder to earn free flights and makes you a less-valuable customer to any one airline.

In some cases, you can transfer miles between programs: WebFlyer has a mileage converter on its site that can show you possible routes for getting miles from one program to another.

Or it could be that you’re better off looking for a credit card program that offers different rewards. Cards affiliated with hotel chains are a popular choice, since the rewards tend to be easier to use. Or you could opt for a simple cash-back card and buy your own airline tickets with the proceeds.