How complicated can credit-card comparisons get?

It was a simple exercise in personal finances — I thought.

Out of all those credit cards, those thousands of credit cards, which ones offer the best value for loyalty program points?

Travel points are addictive. To qualify for trips, you end up packing every purchase possible onto your credit card.

Which is what the credit card issuer wants. Even if you never pay a dime of interest, they collect a 1% to 3% fee from the merchant as a transaction fee.

Complicated!

To keep things simple, I only compared travel-point cards to travel-points cards, and cash-back cards to cash-back cards.

At least I thought it would be simple.

To calculate the value of travel-point cards, I'd measure the number of points needed for the equivalent of a seat sale to Vancouver, say \$400 excluding taxes.

And cash-back cards, what could be simpler? If you're packing \$30,000 a year, or \$2,500 a month onto your credit card, how much cash do you get back?

(Assumption: You pay off your balance every month to avoid interest charges.)

Simple?

Hah!

The game seems to be to make the calculation of value so complicated as to dissuade the average Joe from even trying.

More complicated!

Here's how , with cash-back cards, they muddy up the value picture.

On a major bank's no-fee "Cash-Back" MasterCard, you get ... 2% back on grocery store purchases up to \$6,000, then 1% on the rest. Then .5% (i.e. half of one percent 1/3 wow!) back on all other purchases up to \$6,000, then 1% on the rest.

Got that?

Or how about this major bank cash-back card: A 2% cash-back up to a maximum of \$6,000 in grocery purchases per year, then 1% on the rest. For all non-groceries, .5% back up to \$6,000, than 1% on non-groceries after \$6,000.

Try to figure that one out!

With travel points, you must factor in the service at the other end of the equation.

It's no secret, for instance, that demand far exceeds the supply of Air Canada Aeroplan seats assigned to the 15,000 point level Edmonton-Vancouver short haul flights.

I went on the website, and at 15,000 points couldn't find a single weekend return flight to Vancouver available through the end of April. If you were willing to go up to 17,500 points, more choice was available.

I have stuck with my own all-airlines credit card for years, because those 15,000 points are assigned as cash to a travel agency who treat me as a human being. Only now I realize it's not that good a deal.

The best travel cards

Thank goodness there are websites out there that (I hope) appear not to be in cahoots with any particular credit card company or airline.

Rewards Canada, www.rewardscanada.ca/topcc2011 went through all the calculations and came up with the best-value travel point cards for 2011.

The clear winner was the Capital One Aspire Travel World MasterCard.

This Capital One card offers 2 trave points for every dollar spent on ALL purchases 1/3 with the same 15,000 points for my trip to Vancouver.

The card has an initial sign-up bonus of 35,000 points, (2.3 trips to Vancouver), a yearly renewal bonus of 10,000 points (2/3rds of another Vancouver trip) in return for a \$120 annual fee.

So if you were pumping \$30,000 a year through this card, you'd have 70,000 points (including the renewal bonus) , good for 4.7 trips to Vancouver.

That's a really good deal! Except you have to make \$70,000 a year to qualify for the card.

I won't go into the calculations 1/3 the website lays Ôem out for you, but Rewards Canada also recommends the CUETS Platinum Class MasterCard, BMO World Elite MasterCard and the BMO Gold Air Miles MasterCard.

The best cash-back cards

On the cash-back side, the Red Flag Deals website, http://creditcards.redflagdeals.com has put its mega-calculator to work on the best cash-back credit card programs.

It cites the Scotiabank No-Fee Moneyback VISA Card, for its simplicity. No fee, no conditions, just a simple 1% back every year on all purchases. On \$30,000 through the card, that's a \$300 credit with no annual fee.

It also recommends the Scotiabank Momentum VISA Infinite. More complicated, with an annual \$99 fee, but it gives you 4% back on the first \$25,000 spent at gas stations and grocery stores, so if you spent \$20,000 on gas and food , that's \$800 back.

The Red Flag site also likes the Capital One Aspire Platinum MasterCard (no fee, 1% cash back on all purchase, and a year-end 20% top-up on cash rewards already earned.)

If you'd like to share other excellent credit card deals you have discovered, drop me a line at graham.hicks@hicksbiz.com. I'll collect them for another story another day.

"If I was real smart," says my financial friend. "I'd cut up all my credit cards and just patronize stores that'll give me a 3% discount for paying cash!"