A rewards card is a necessity with all the amazing offers. We've reviewed hundreds of options in order to help you find the best rewards credit card. We considered many factors but the most important were the card's rewards rates, bonus options, and fees.
We are avid rewards card users, so we have tried many of our top choices firsthand. You'll find options that suit your needs, whether you are looking for a large welcome bonus, cash back on everyday purchases, or flexible travel points.
The best rewards credit cards
-
- Unlimited cashback: Wells Fargo Active Cash(r) Card
- Travel sign-up bonus: Chase Sapphire Preferred(r) Card
- Bonus cash back: Chase Freedom Flex(sm)
U.S. gasoline and U.S. supermarkets. Blue Cash Preferred(r), Card from American Express
- Customizing your cashback: Citi Custom Cash(sm) Card
- Dining and U.S. supermarkets - American Express(r), Gold Card
- No annual fee for a travel card: Bank of America (r) Travel Rewards credit card
- No annual fee for dining rewards: CapitalOne SavorOne Cash Rewards Credit card
- Travel rewards: Citi Premier(r) Card
- Students: Discover it(r) Student Cash Back
- Bad/building credit: Discover it(r) Secured Credit Card
- Premium travel rewards: Capital One Venture X Rewards Credit Card
What is a reward credit card?
Rewards credit cards earn cash back, points, and miles as well as other types of rewards for purchases. The card you choose and the type of spending will determine the amount that you earn. There are cards that offer flat rates of 2% for purchases, for example. Some cards offer higher rates for certain categories, like 3% for groceries.
Each eligible purchase increases your reward balance. If you spend $100 on a credit card that offers 2% cashback, you will earn $2 in rewards. Redeem rewards only if you have earned enough cash back to meet the minimum redemption requirement. Many of the top rewards credit cards do not have a minimum requirement, so you can redeem rewards at any time.
Different types of rewards credit cards
There are three types: cash back credit cards, travel rewards credit cards, and store credit cards.
This is a simple concept, but before we get into the various types of rewards cards, there's one thing to remember. Although rewards cards can be classified into multiple categories, there is usually one category that best suits each card.
Popular examples include the Chase Sapphire Preferred(r) Card. You can redeem points for cash back, travel, and store gift cards. Its points are most valuable when used for travel and you can earn bonus rewards on purchases made while traveling. It is a travel credit card.
Credit cards with travel rewards
Travel credit cards are designed for people who love to travel.
The most complex type of reward card is the travel card. This is because each card has a different way of allowing you to use your travel rewards. Here are some examples:
- Earn frequent flyer miles with airline credit cards Redeem miles to receive free flights with the airline
- Earn points in a hotel loyalty program with your hotel credit card Points can be used to book a stay at that hotel chain.
- You can redeem points at a fixed rate such as $0.01 per Point towards travel purchases with some travel cards, including many no-annual-fee travel cards.
Some cards offer transferable rewards. This means that you can transfer your rewards from one card issuer to another. You can also redeem your rewards at a fixed rate with these programs. These are the top travel reward programs:
- American Express Membership Rewards
- Capital One Venture Rewards
- Chase Ultimate Rewards
- Citi ThankYou Reward
Cash back credit cards
Cashback credit cards are very straightforward and you can get cash back when you use your card to make a purchase. This could be as low as 1% or 2% for purchases within a bonus category, or even higher.
Are you curious about what you can do to earn this cashback? Most cashback cards allow you to use your rewards as a statement credit towards your credit card bill. You could reduce your credit card bill up to $100 by getting $100 cash back. Cashback is not a replacement for your minimum payments. This is the most important thing to remember. You must still pay the minimum amount if there is a balance.
Cash back cards allow you to deposit cash directly into your bank account or send a request for a check by mail.
Credit cards for stores
Store credit cards are not the best type of reward card. Cashback or travel cards are usually better deals. Store cards are available everywhere. Some have their benefits if you shop in the store frequently, so it is worth learning how they work.
Many store cards offer rewards that you can use to redeem for gift cards at the store. Some exceptions are the Costco Anywhere Visa (r) Card by Citi which earns cash back. Some store cards also offer discounts on purchases and zero-interest financing.
An open-loop or closed-loop store card is available. Closed-loop store card only works at the retailer or any other brands. You can use your open-loop store card with other merchants. Some stores offer only one option, while others offer both. If they offer both, customers with lower credit scores are generally approved for closed-loop cards. Open-loop cards are available to applicants with higher credit scores.
Let's take, for example, a T.J. Maxx credit card One of these could occur:
- The TJX Rewards(r), Credit Card has been approved. This card is closed-loop, which means you can only use it at T.J. Maxx or other brands.
- You have been approved for the TJX Rewards (r) Platinum Mastercard(r). This card is open-loop and can be used wherever Mastercard is accepted.
- You are not eligible for the T.J. Maxx credit card.
Which credit card offers the most rewards?
The Wells Fargo® Active Cash(r), Card is the best credit card to earn rewards. The card earns unlimited cash rewards and has no annual fees. It also offers a generous welcome bonus as well as a 0% intro APR.
We recommend the Wells Fargo Card because of its cashback rate. You can earn cash back regardless of your spending habits. We've never seen a better rate than the unlimited 2% cash reward rate.
There is no one card that offers the best rewards credit cards for everyone. We recommend comparing all your options to find one that is best for YOU. A card with bonus categories that match your spending habits to a T or a card that covers expensive airfares could be the best reward card. You can maximize your credit card rewards if you choose the right fit.
What are the possibilities for credit card rewards?
Credit card rewards can be redeemed through the card's reward program. You can redeem them depending on which card you have. These are the most popular redemption options for credit-card rewards.
- Cash back as a statement credit on a credit card bill, a direct bank deposit to a bank account, or as a cheque
- You can use them for travel via the card issuer's portal or as a statement credit towards previous travel purchases.
- You can redeem them for gift cards in stores.
- You can redeem them for products and services.
Logging in to your online account should give you the option to redeem your rewards. This will allow you to view all available redemption options and choose the one that interests you.
Find out how much value each redemption method gives you. Sometimes people assume that they get the exact same value regardless of how they redeem their rewards. This common error can lead to financial loss. Your use of rewards can often affect the value. You may be able to get cash back if you have travel points on your card. However, the rate per point is lower.
Do I need a rewards credit or card?
If you have a high credit score and are willing to pay the entire bill each month, then you should consider a rewards credit card.
Reward cards are a good choice. You will have to pay for your purchases anyway. To get some back on the money you spend, why not use a reward card? Only a few situations are where a rewards credit cards aren't right for you:
- Your credit score is not good. Learn the best way to improve your credit score. To get the best rewards credit card cards, you will need a FICO(r), Score of at minimum 670. You can get rewards cards with more value by improving your credit score.
- The card issuer may charge you credit-card interest if you don't pay your full monthly bill Your rewards are almost always less than the cost of interest.
These are the pros and cons of a rewards credit line:
Pros
- Redeem points on your purchases
- Many of these offer welcome bonuses
- These packages typically include travel protections and complimentary shopping
- Credit building is possible when you pay your bill in full
Cons
- High APRs are common.
- This can encourage you to spend more.
- It May be subject to an annual fee
- Only those with good credit can get top rewards cards
Alternatives to Rewards Credit Cards
A different type of credit card may be best for you depending on your financial situation. These are some common scenarios where a rewards credit card isn't the best choice. Here are the options for which card you can choose instead.
A credit card that has a 0% intro rate on purchases will allow you to avoid paying interest for the first 15 months. If you have a 15-month intro APR of 0%, there will be no interest charges for the first fifteen months.
CHECK OUT THE LONGEST OFFERS: Best 0% APR Credit Cards
To improve your credit score, you should first learn how to calculate your credit score. Each credit score is classified into a specific range such as "fair credit" and "bad credit". Knowing your credit score will allow you to choose the card that you are most likely to be approved for.
FIND THE RIGHT CARD FOR YOUR CREDIT SCORE:
- The Best Credit Cards for People with Bad Credit
- The Best Credit Cards for Fair/Average Credit
- No Credit Starter Credit Cards
Balance transfer credit cards are a good option for people who have credit card debt. These cards offer a 0% intro APR on balances transferred from other credit cards. Although there is a balance transfer fee, this can help you save quite a bit of interest. This comprehensive guide to balance transfers will help you understand this offer.