Play your cards right to get the most out of credit perks

Knowing how to earn rewards from your credit card can make these programmes work for you.

Most of the perks that come with credit cards strike me as silly. Sure, they sound good (who wouldn't want a personal concierge service?) yet they often turn out to have hidden costs, are difficult to use or work only in a few places. Valet parking sounds good, but less so if it is limited to one section of Abu Dhabi airport for three hours on Saturdays and Sundays. There are certain rewards, however, that amount to more than just a way to lure customers. Take, for example, the cards that Citibank offers in its partnership with Emirates airline. Or HSBC, which gives you airline miles with purchases, too. Or Barclaycard, which gives you "points" that you can spend. In theory you could actually get something for nothing out of these programmes. So which gives you most?

The answer lies in preferences and a little basic maths. If you would prefer discounts at a few stores in the UAE, look to Barclaycard or offerings from banks such as Commercial Bank of Dubai, with its Tijari points programme, and Union National Bank, with its UNB rewards programme. If you want minutes on your phone, look into Mashreq's new Etisalat card, which gives you two points in the phone company's rewards programme for every dirham you spend.

Airline frequent flyer miles, though, are probably the most common credit card perk. It is also fairly easy to evaluate which programmes and which cards give you the most bang for your buck - although, as you will see, it is not necessarily easy to figure out which card suits your spending habits best. First stop: the immensely popular Emirates-Citibank cards. With these you get a certain number of Skywards miles - Skywards is the airline's frequent flyer programme - for any purchases you make. So, for example, on the Silver card you get one mile per US$1 (Dh3.67) spent and pay an annual fee of Dh300 ($81.67). The Gold card gives you 1.25 miles per dollar and costs Dh550 a year, while the Ultimate card gives you 1.5 miles per dollar and costs Dh1,000. The high-end Ultima card costs Dh3,000 a year but gives you two miles per dollar.

Let's take a look at what this all really means. In the Skywards programme, a round trip to London in economy class costs 40,000 miles. To accumulate that number of miles with a Silver-level card, you would have to spend about Dh150,000. If you have a Gold card, your spending would have to be Dh117,500. For Ultimate cardholders, it would be Dh98,000 and for Ultima members, Dh73,450. So let's say your sole purpose in using your card is to get one trip to London per year - a ticket worth Dh3,750. In that case, getting an Ultima card would be a mistake, because you would pay a Dh3,000 fee, meaning your discount on the ticket amounts to just Dh750.

Then again, if your spending amounted to less than Dh98,000, you would not spend enough in a year to get your trip with an Ultimate card, although you would get it at a discount with the upper-end Ultima. The moral of the story: get enough value out of your perks to justify the annual fee without bending over backwards to charge everything on the card. Generally, the more you plan to fly and the more money you spend, the more you will save with the higher end cards, which give you more miles for your dirham but come with higher fees.

Placing yourself can be difficult - so go to www.skywards.com and look up the cost (in miles) of the flight you take most often. Then focus your choice around making that flight cheaper - or even free - by constructing a scenario like the one above. And, of course, do not forget that you can get extra points by booking flights with the card and buying products from brands such as Adidas, that have partnered with Emirates.

Skywards might be the biggest game in town, with 3.6 million members and 30 per cent year-on-year growth. But it is not the only one. HSBC has partnered with the Air Miles programme, which lets you buy a bunch of stuff with miles (including, of course, flights). HSBC Classic and Gold card holders get one air mile for every two dirhams spent, while Platinum cardholders get one mile per dirham. A return flight to London under this programme costs 195,000 miles, which means that you would have to spend Dh390,000 on Classic and Gold cards and Dh195,000 on the Platinum plan.

Those look like high spending figures compared to the Citibank cards. The Air Miles programme does give you some flexibility when reserving flights, however, allowing you to pay part in miles and part in cash. With our London example you could opt instead to redeem 30,000 miles and pay an extra Dh1,900. That turns out to be a pretty nice deal if you use a Platinum card: charge just Dh30,000 and you get a discount of about Dh1,250 on a flight to London (I am factoring in the card's Dh600 annual fee here). Put another way, that is the equivalent of 4.2 per cent cash back on your purchases.

Credit cards in the UAE - and these are just a few players in a vast arena - come in a lot of different flavours. Many of the perks may be marketing fluff, but many of them also are genuinely useful and there is no reason to avoid them. But as you go a-swiping, remember that the banks are not there to give you something for nothing, and it is up to you to make sure they work for you, not the other way around.

So pay off your balance every month. Full stop. Especially in the UAE, where interest rates are around 30 per cent a year for most cards (they are often quoted at around three per cent, but do not be fooled; that is a monthly figure) and racking up debt does not come cheap. @Email:[e-mail]