TORONTO - With so many travel reward credit cards on the market, just narrowing it all down to a manageable list is enough to want a vacation.

It's a complicated dilemma for many Canadians who are trying to decide which card is best for them, and whether they're racking up points in the fastest way possible.

But when it comes to reward cards, one size doesn't fit everybody. Since digital assets like rewards points are playing an increasing role in people's lives, analysts in the reward industry say care should be taken in deciding which card, or cards, to go with.

"Loyalty programs should be part of financial planning," said Patrick Sojka, chief executive of Rewards Canada, an organization that tracks the various cards.

"It's almost like your RRSP. You do a little bit of research, you set your goals, and you put them in place."

Sojka suggested drawing up an outline of how much money you expect to spend on your credit cards and where that money is spent, before looking at options on the market.

Consider also how frequently you travel and whether there are perks beyond the points that you might value.

Toronto resident Terrence Drake carries four travel reward cards that span the major credit card companies — each one giving him something different.

"They all seem good to me," Drake said.

All of the major Canadian banks have their own slate of cards and the offers vary wildly from one to the next. Some have substantial travel insurance while others promise a higher rate of points accumulation or lower annual fees.

Drake spends a lot of his time travelling to various destinations across North America and Europe as a circus performer. His frequent travel is one reason why he spent so much time assessing his card options, he said.

"Some of them have pretty sweet offers but they don't always package the information well," he said.

"There's a bit more research required. It's not a decision you can make in a couple seconds or minutes."

Drake narrowed down his favourite cards by choosing ones with the best travel insurance coverage and most favourable medical plan. His cards have coverage that more than compensates for the annual fees, he said.

Many travel reward cards offer bonus points for car rentals, hotel bookings or spending money at certain retailers.

But, if you don't rent cars, stay in hotels or fly often, then consider the other options. Some cards deliver a lower rate of points accumulation, but don't charge an annual fee.

"It really comes down to how much you're spending per year, and what you're spending your money on," said Stephen Menon, associate vice-president of Aeroplan products at TD Bank.

If you hardly travel at all there are alternatives, like a credit card that returns a percentage of cash on monthly purchases. The reward will be more immediate and the annual fee may be lower than a travel reward card.

Most importantly, try not to get swept up in the excitement and emotion of collecting and redeeming points.

Spending money in exchange for rewards generates positive reinforcement in the brain that encourages buying more things to get more rewards. If you aren't careful, you may find yourself buying extra items you don't need to accumulate extra points.

A survey conducted by TD Canada Trust found that 35 per cent of Canadian respondents said they felt "happiness" when they redeem points for travel rewards. Another 26 per cent felt satisfaction, while 16 per cent said collecting points gave them a sense of accomplishment.

"You're not necessarily feeling a sense of sacrifice leading up to that ultimate goal," said psychologist Ashley Howe, in an interview tied to the survey.

"In order to save rewards you have to purchase something, and that is an reward in and of itself."

The popularity of reward programs with Canadians has led to a blossoming rewards industry.

The next evolution will integrate earning points with mobile payment systems where you tap your phone at the register.

Some companies have already started to test the technology, like Starbucks which lets users earn points when they use a prepaid account linked to their phone.

For retailers, it opens the possibility of even more interactive cross-promotions and targeted discounts, said Martin Hayward, vice-president of global digital strategy at Aimia (TSX:AIM), the company behind the popular Aeroplan program.

"My fear at the moment is that technology is leading people to be just a little bit overexcited about this new access to bombard people with offers," Hayward said in an interview at an industry conference last fall.

"If everything is half price, of course you can encourage people to buy stuff they weren't going to buy, but it's not profitable. It's getting this right balance between what's right for payments, the customer and merchants."

News from © The Canadian Press, 2014