WorldPoints, a review

This was the first credit card that I ever got.  They were on campus at my college.  I was a naive (stupid) freshman.  A credit card?  No annual fee, you say?  AND I et a free t-shirt?  C'mon, I'd be stupid to pass this up, right?

It was for an MBNA America Visa card.  Over the years my wallet has seen a few cards have come and go, but this one remained.  It's my oldest existing source of credit.  Although it's a small factor in credit scores, it's a factor still.  Besides, it has my school logo.  I feel like shaking my pom poms every time I use it.  Cha-ching!  Rah Rah Rah!

A few years ago, I stopped using the card entirely.  It had zero points programs associated with it.  I began using my American Express Hilton Honors rewards card, and on occasion the Discover card.  But I continued to carry the MBNA Visa, because some places only accepted Visa or Mastercard, and it was (and still is) my only card of either type.

I was about to cancel the card, when I learned about the WorldPoints program.  Simple, straight forward.  One point per dollar spent on the card, redeemable for cash, gift cards, travel or merchandise.

So, I still have the card, which has since been bought out by Bank of America.  Or B of A for short.  AKA Bunch of A-holes.  Sorry, that's rude.  I didn't make it up.  Although I wish I did.

Anyway, how about this WorldPoints program?  Is it any good?  Let's take a look.

As I said, the program is rather straight forward.  Charge one dollar, get one point.  Unlike most card programs, they do not offer bonus points for charging gas, groceries, or other basics.  Nor do they offer specials for restaurants, travel, or books.  There's an image that claims to offer two points per dollar spent at select retailers.  However, I can't seem to find the list of such retailers.  Here's the logo.

At any rate, I don't think I have ever earned 2x.  Not even inadvertently, which means that their select list of retailers is not a list of places that I frequent.  So, putting that aside and moving forward with the idea of one point per dollar leaves the question, what can you get for your points?

The answer, almost anything.  But are they good value for your point dollar?  Mostly not.  the measure that I like to use is essentially 1% on purchases.  Given that 1% cash back, and 5% on purchases such as gasoline and groceries is easily available from Citi and other card issuers, it would seem that that should serve as a baseline standard.

The categories offered by WorldPoints for redemption are Cash, Gift Cards, Celebrity Cruises, Travel, "Ultimate Access," Magazine Subscriptions, and Merchandise.  I'll go through each category and assess the value of each type of reward.

• Cash.  Your first cash reward kick in at 2,500 points.  You can request a check for $12.50.  That's a pathetic 0.5% return on purchases.  That ratio remains as you get $25 for 5,000, and $37.50 for 7,500.  At the next tier, you get $80 for 10,000 points, $120 for 15,000, and $160 for 20,000, for a ratio of 0.8%.  Still sub-par.  At the highest levels, you get an even 1%.  For 25,000 points, you can request a $250 check, $350 for 35,000, and $500 for 50,000.  At high point levels, you're shooting par.  But let's face it, that's not good enough.
• Gift Cards.  Things get even worse for gift cards.  For 3,250 points you can get a $25 gift card to places such as Restoration Hardware, Fossil, or Linnens n' Things.  That's a 0.77% return on purchases.  In order to get a $50 card to such places as Banana Republic, Barnes & Noble, or Amazon.com, you need 6,000 points.  That's a 0.833% reward.  The ratio remains the same on $100 gift card offers for 12,000 points.  You only get a full 1% when you redeem 25,000 points for a $250 Celebrity Cruise on-board credit.
• Celebrity Cruises.  It's odd that Celebrity Cruises has its own category.  They seem to fit in either gift cards or travel.  I guess they're paying some big bucks for this right.  Basically, you can get on-board fitness or spa packages, robes, or cabin upgrades.  Unless you already have plans to take a Celebrity Cruise, this doesn't sound very attractive.
• Travel.  Travel might be the best deal available.  You can redeem 25,000 points for a flight anywhere in the continental 48 states.  Hawaii or Alaska require 45,000 points, 65,000 to Europe, and 85,000 to Asia or Africa.  All travel is subject to what they call "Maximum Dollar Value" or MDV.  If the dollar cost of a reward exceeds the MDV, you must pay the difference in order to obtain the reward.  The good thing is that the MDV is somewhat generous.  For example, the MDV for a domestic flight within the continental 48 states is $400.  Most flight will be under that, so it's not an issue.  If you manage to use reward points for a flight that would have cost you $400, you have a nice 1.6% return on your points.  Of course, that's rare.  Most domestic flights can be found around or under $250, bringing your return back to 1% or less.  However, most airline mile cards charge an annual fee.  This offers the same ratio for domestic flights without the annual fee.  Of course, you don't actually get the miles, which can be a factor in airline status.
• "Ultimate Access."  Without a doubt, these are the worst offers available.  They are essentially "experience" offers.  You can obtain tickets to events.  But no, not the BCS championship or the Masters.  You can redeem 25,000 points for two tickets to see a taping of Conan O'Brien.  Are you kidding me?  When I was in college, the Pat Sajak show used to pay groups of students to come to tapings.  I know Conan O'Brien is a tad more popular, but still.  If you are a hockey fan, the coolest offer is 100,000 points for two tickets to a 2007 NHL Stanley Cup final game with two personalized authentic NHL Jerseys.  I don't know how much Stanley Cup finals game tickets go for, but this one sounds pretty cool.  The worst offer is 5,000 points for a one hour phone consultation with personal shopper and stylist, Kate Shrifrin.  First of all, who?  Second, a PHONE consultation with a personal shopper and stylist?  Doesn't she need too know what I look like in order to offer fashion advice?
• Magazine Subscriptions.  Don't bother.  26 issues of Forbes for 7,200 points.  Magazines.com offers 26 issues for $29.98.  At this rate, it's a 0.42% return.  Terrible.
• Merchandise.  This one is the trickiest.  Most of the merchandise is not a good deal.  For example the Sony Cybershop DSC W-55 is available for 32,300 points.  Or at Best Buy for $199.99.  That's a whopping 0.62% return.  If housekeeping is your thing, you can get the Eureka Optima Lightweight Upright for 9,700 points, or $59.99 on Amazon.com, a return on points of 0.62%.  I have found good deals in the past, but they are the exception rather than the rule.

I would not rate the WorldPoints program highly.  On a scale of 1-10, I would give them an overall score of 5.  They rate highly in variety of rewards, but poorly in value of such rewards.  Honestly, the best deal kicks in at 25,000 points where you should either take the cash or a flight that would otherwise cost you more than $250.  Other than that, get a different card.

Comments

[Stephen Snyder]

I'm not a huge fan of rewards based credit cards. Just a thing of mine.

[lamoneyguy]

Hmmm... Stephen, are you opposed to all credit cards, or just rewards cards? I can understand an aversion to all CCs, but if you are open to CCs, it seems to me that rewards cards with no annual fee are the way to go.

[BillyOceansEleven]

Great analysis! I agree with your conclusion on the WorldPoints program. About the best you can hope to do in this program is 1%, and you have to accumulate a lot of points to get to that level. No thanks! I'll use my Chase Cash Rewards Plus for gas, grocery, and drugstores (5% back), Citi Professional for restaurants (3% back), and AMEX Blue for everything else (1% back, plus I'm in a 0% APR promo for another 8 months).

I got my Worldpoints card the same way you did. I applied on campus for an LSU Alumni card, was switched over to WorldPoints when I called to cancel because I was receiving no rewards, and since then have found better alternatives. The only thing I use the card for now is the sweet billpay feature which allows you to pay other credit cards with your MBNA issued card. Gives an extra month of float!

[Yuri]

Which card would you use for best rewards?

[Yuri]

Which card would you use for best rewards?

[credit card guru]

If you are looking for best credit card deals with reward programs you need to have good or excellent credit history and a clear vision of how you are going to manage your money. You need to understand your spending habbits and find the rewards program that will suit you.

[edith c]

Thank you for this information. I have been trying to use my worldpoints for travel, but everytime I got a quote I couldn't understand why they stated that it would be 25,000 + $$$, or I could purchase a ticket for $$$. Now I realize the + cost is due to the price being over the MDV. In this case, it may be cheaper for me to book flights the regular way.
Thanks again.
edith c

[edith c]

Now, if you plan to use your CC rewards as an investment, you can forget about it! The returns suck. The way I see it is: you have two options. 1. You can get something back for using CC; or 2. You can get nothing back for using your CC.--- I choose option 1.

[selena]

Experienced credit card holders know what reward credit cards cost. They promise no annual fees but at the same time you pay much more than the average in interest. Thus you you gain and lose something in exchange. Anyway, if you were to choose among this type credit cards, cash back credit cards would be a good option as you always can expect to get actual money for spending with the plastic.

[Credit Card Cashback Reward Enthusiast]

This is in response to the posters asking which credit card to use for the best rewards. Basically, the card that is best for you will depend on your categorical spending profile -- how much you spend in categories like gas, groceries, restaurants, travel, etc.

To quickly see which credit card will pay you the most for your normal spending profile, you can use the rewards calculator at www.creditcardtuneup.com .

[alexis brown]

The MBNA (now Bank of America) Worldpoints credit card is one of the worst ways to try and earn miles for flights. Just try and redeem the miles; you will invariably have to use 1,000s more points than a traditional airline card plus have to pay usually a few hundred dollars on top of that for the ticket. The agents are high-pressure sales people who offer travel insurance at least three times during your call. You can't compare schedules side-by-side or hold one for more than a few minutes before they force you to purchase it. Don't bother with the card; it's a complete rip-off.

[WorldPoints]

Getting a rewards credit card is fine provided you do not intent to carry a balance with it.

If you carry a balance with your rewards credit card, the upside of rewards earned could be easily eaten up by the high interest charges. This is especially true once the 0% introductory offer is over, if any.

Getting a right rewards card based on your lifestyle and your needs is important to ensure you can get the most out the card.

First, determine what type of rewards you prefer. Cash? Airmiles? Merchandise? Co-Branded?

And it's important to read and understand the terms and conditions(normally in fine prints) of the rewards given. There are always restrictions and special conditions applies.

[Rick]

i have used the worldpoints system for many years now, and find it to be a good fit with the way that i use a credit card. i put high charges on my card each month and pay it off each month, so a marginally higher interest rate in lieu of a rewards program is a good trade.

i don't put much on the card (relatively speaking) from restaurants, grocery stores, or gas stations, so the cards that give a higher rate of return from those purchases don't offer anything substantially more to me.

i use the point exclusively for airline travel, trading 25,000 points for up to $400 in airline fees (or 100,000 points for up to $1,500 of first class fees to hawaii). i look at this as a airline discount program, not a free ticket program, because i live in knoxville, tn. you can't fly anywhere from knoxville for under $400.

i like this card better than an airline affiliate card for two reasons: first, there is no annual fee with this card. second, there are NO blackout dates or times with the tickets you get with this card. conversely, it's almost impossible to get the flight that you want with an airline miles credit card - there's just too many limitations on their programs.

if anyone is aware of a card with a rewards program that would do a better job in this situation, i'm all ears.

[Whit]

I've found it's actually really easy to earn more than 1 point per dollar on my worldpoints card. bankofamerica.com/worldpointsmall has an extensive list of where you can shop for that, if anyone was wondering.

[Eric P]

Well, I've had by B of A "worldpoints" card now for a few years. I had gathered close to 40,000 points - that I didn't pay much attention to. But I finally decided to redeem them and get an item from there catalogue. I can't even make a comment on the item because it has been backordered now for 7 months!!! (Yes that's right, SEVEN months). I have yet to see this item, Their website shows it backordered with an ever-changing "predicted ship date". Ask me again, what I think of "WorldPoints"?

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[norm]

I hate World Points. I used some points this past January to get a camcorder, but since their on-line catalog doesn't list model numbers, I received a much different one than I expected. I lost track of how many frustrating calls I had to make to get them to finally take it back, but here it is in mid-March and I still haven't got my points back. Every time I call, they tell me it'll be another 2-3 weeks. Horrible customer service, horrible program.

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