Credit cardsI don’t know about you, but I spend a boatload on credit cards each year. Between travel for work and regular old personal purchases, it adds up.

And I have to say that I *really* enjoy the perks that come with reward credit cards. It feels like free money. (Though, in retrospect, when I think back to all the lost weekends, and the jetlag, it really is more like earning it. But I digress.)

As part of my public service (i.e., years of fumbling around) I’m happy to report that there really is a difference between the rewards that credit cards give you. Some credit card points/perks only give you credit toward air miles and/or free flights, like my British Airways Visa. Other cards give you points toward free hotel stays, liberal causes, just plain old cash back, you name it. But I find those one-trick-pony rewards restrictive. Much better, I think, are credit card reward points that YOU can choose how to spend.

There are two categories of these: those with annual fees, and those without. The cards with fees have better rewards programs (the points add up faster, or there are fewer points required to get what you want).

But if you don’t spend thousands and thousands of dollars a year on credit cards, the annual fees can cost more than the rewards you earn.

Case in point: American Express has what I believe is, hands down, the best rewards program out there. Three reasons: first, Amex is very gay-positive, according the HRC’s Buying for Equality Guide. So I feel good about using a credit card from a company that actively supports our community.

Second: my Amex card requires me to pay off the bill every month. (I’m aware not all Amex cards do, but I prefer the required monthly payoff. I can’t build up debt that way.)

But most importantly, every dollar I spend earns me a Membership Rewards point. And these Membership Rewards points can be used for all kinds of things: hotels, airfares, cruises, actual items like iPods, or gift cards to dozens of stores, including Toys ‘R’ Us, Gap, Williams Sonoma (gay heaven), Pottery Barn (gay mecca), and Bloomingdale’s (gay nirvana).

The Amex Membership Rewards program is basically 1% cash back, but in the form of points. So a $50 gift card is 5,000 points. Or you can just get cash, but this costs twice as much ($50 in cash is 10,000 points). There’s no ceiling to the points you can earn, so if you rack up tens of thousands of dollars in business expenses each year, you can pile on the points.

(My dirty little secret: each Christmas, I save a bundle on gift-giving. All year I save the points earned from business expenses. Then come November, I cash them in for gift cards to all the stores I want to buy people presents from.)

But here’s the catch: the annual fee is $75, and that comes out of my pocket. So if I didn’t spend at least $7,500 a year on the card, it wouldn’t make any sense to sign up for the rewards; I would actually be losing money.

A very similar rewards program is offered by Citi Diamond Preferred Rewards Credit Card for no annual fee. And it’s better than Amex in some other ways, too: You get FIVE reward points for every $1 spent on purchases at supermarkets, drugstores and gas stations; but still 1 point for every $1 on all other purchases. Like the Amex program, you are not limited to just air miles or hotel stays, you can use the Citi ThankYou Points for all kinds of things.

But there is a down side to skipping an annual fee. There is a cap on your rewards; you can only earn up to 75,000 ThankYou Points during any calendar year. And it costs a bit more points to earn a reward. With Amex, you can get a $25 gift card to the store of your choice for 2,500 points; with Citi the same $25 gift card to the same store is 3,500 points.

So if you spend a lot of money on credit cards, I recommend a rewards card with an annual fee; otherwise go fee-free and get almost the same rewards.

If you really want to stick with gay rewards, Dana at Mombian talks about gay-themed credit cards that give to gay causes. Meanwhile Caitlin discusses her favorite credit cards that give you unusually high rewards (2%, 3%, even 6% on specific things). Finally, you can compare all “reward” credit cards, at bankrate.com.

Happy shopping!