All Rewards Cards are not created equal.

When looking for a rewards credit card you need to know that not all rewards are the same. First there are credit cards issued through the airlines that are tied into the airlines frequent flyer program. Then there are rewards credit card that offer a variety of rewards including airline tickets.

AIRLINE CREDIT CARDS:
One of the first differences is that Airline Credit Cards typically charge an annual fee.  They also typically have a higher APR ( Annual Percentage Rate ) than a Bank Rewards Card. But as we said earlier,pay your balance off monthly and avoid those interest charges.

On the upside they usually give you a milage bonus of between 15,000 to 30,000 miles. You receive a certain number of miles when you apply and are approved for the card and the remaining miles once you have had a certain dollar amount in charges. This amount is typically very low.  If you are flexible, 25,000 will get you a round trip ticket within the continental United States.

Your airline frequent flyer miles may also be used to get upgrades to Business or First Class. Many times they may be used to get flights on partner airlines. Most airlines also provide the option of using your miles for car rental and in many cases hotel accommodations.

BANK REWARDS CARDS:
Bank rewards cards have the advantage of generally not having an annual fee. They also generally have an interest rate lower than the Airline Cards; though the interest rate might be higher than a non-rewards card issued by the same bank.  An additional advantage is that you can use them for any airline.

So what is the down-side? Well it is what you get for your miles. A point in these programs typically works out to be about a penny in terms of airfare. The threshold to be able to use these points for air travel is 25,000 points.  So lets say that you have accumulated 25,000  miles through one of these cards. That would buy you a ticket worth $250.

As with any financial decision, you need to make some comparisons based on your own goals and objectives.