Rewards credit cards offer more than just a line of credit. As you use your card, you’ll earn something in return – usually points, airline miles or cash back.
Typically, you’ll earn your rewards at a set rate on each purchase. Some cards offer a high rewards rate on specific types of purchases, like groceries or dining, while others reward all purchases at a lower rate.
There’s a lot to think about when choosing a rewards credit card, but it’s easiest if you first ask yourself two questions. What types of expenses make up the largest parts of your budget? Second, what kind of rewards would you like to earn?
From there, we’ve got you covered. Our team of experts analyzed 1,640 rewards credit cards to give you our top picks. Check out the best rewards credit cards from our partners below.
Rewards credit cards offer more than just a line of credit. As you use your card, you’ll earn something in return – usually points, airline miles or cash back.
Typically, you’ll earn your rewards at a set rate on each purchase. Some cards offer a high rewards rate on specific types of purchases, like groceries or dining, while others reward all purchases at a lower rate.
There’s a lot to think about when choosing a rewards credit card, but it’s easiest if you first ask yourself two questions. What types of expenses make up the largest parts of your budget? Second, what kind of rewards would you like to earn?
From there, we’ve got you covered. Our team of experts analyzed 1,640 rewards credit cards to give you our top picks. Check out the best rewards credit cards from our partners below.
CreditCards.com credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.
CreditCards.com credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.
CreditCards.com credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.
CreditCards.com credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.
CreditCards.com credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.
CreditCards.com credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.
Earn 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and when you pay using PayPal, up to the quarterly maximum when you activate.
1%
Plus, earn unlimited 1% cash back on all other purchases – automatically.
At A Glance
Intro Bonus
Cashback Match™
Intro Offer: Unlimited Cashback Match - only from Discover. Discover will automatically match all the cash back you've earned at the end of your first year! There's no minimum spending or maximum rewards. You could turn $150 cash back into $300.
CreditCards.com credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.
Earn 10x points on eligible purchases on your new Card at U.S. Gas Stations and U.S. Supermarkets, on up to $15,000 in combined purchases, during your first 6 months of Card Membership. That’s an additional 9 points on top of the 1 point you earn for these purchases.
5X
Earn 5X Membership Rewards® Points for flights booked directly with airlines or with American Express Travel. Starting January 1, 2021, earn 5X points on up to $500,000 on these purchases per calendar year.
5X
5X Membership Rewards® Points on prepaid hotels booked with American Express Travel.
At A Glance
Intro Bonus
75,000 points
Earn 75,000 Membership Rewards® Points after you spend $5,000 on purchases on your new Card in your first 6 months of Card Membership.
Annual Fee
$550
Regular APR
See Pay Over Time APR
You may earn up to a 125,000-point intro bonus offer if you use our CardMatch tool.
CreditCards.com credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.
CreditCards.com credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.
CreditCards.com credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.
Up to 6% cash back by referring friends! Limited time only: Start with 1%, get to 3% cash back by successfully referring just two friends! Promotional cash back rate lasts for a full year.
At A Glance
Intro Bonus
$100
$100 signup bonus! Apply by May 31, 2021 using promo code RVPROMO to receive a $100 statement credit upon first eligible purchase, if approved. Terms apply.
CreditCards.com credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.
CreditCards.com credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.
CreditCards.com credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.
Earn unlimited 1.5 points per $1 spent on all purchases, with no annual fee and no foreign transaction fees and your points don't expire.
At A Glance
Intro Bonus
25,000 points
25,000 online bonus points after you make at least $1,000 in purchases in the first 90 days of account opening - that can be a $250 statement credit toward travel purchases.
Annual Fee
$0
Regular APR
13.99% - 23.99% Variable APR on purchases and balance transfers
Editorial disclosure: All reviews are prepared by CreditCards.com staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including card rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the bank's website for the most current information.
All information about Capital One Savor Cash Rewards Credit Card, Alliant Visa® Platinum Rewards Credit Card and Chase Sapphire Preferred® has been collected independently by CreditCards.com and has not been reviewed by the issuer.
Guide to rewards credit cards
The experts at CreditCards.com have put together a guide to help you safely choose the best rewards credit card for your financial goals.
The benefit of rewards credit cards is that you can earn a return on your purchases. By no means should this be interpreted as a motivation to spend carelessly. Don’t lose sight of payment requirements and interest rates, as well as any limitations on rewards categories. When used correctly, you can earn rewards through cash back, travel points/miles, and even hotel stays from your spending.
Here’s what to think about when choosing a rewards card:
Do you have a rewards goal in mind? If you are planning to travel, a travel rewards card may be beneficial. Or, if you simply want a return on your everyday spending, then a card that rewards gas & groceries would be a good option.
What do you typically spend more on? Try to find a card that has better rewards for a purchase category (travel, gas, dining, entertainment, etc.) that you tend to spend in.
Rotating rewards categories. Some rewards cards offer increased rewards on certain purchase categories for limited periods of time, typically each quarter of the year. These can be great, but it is important to note when reward categories switch to ensure you are getting the rewards you expect. Further reading: Discover it® Cash Back rewards categories calendar 2021.
Rewards limits. Certain cards will grant rewards up to a defined amount of spending. For example, the Blue Cash Preferred® Card from American Express offers 6% cash back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%). Be sure to keep these limits in mind and read the card issuer details, so you can receive the rewards that you expect.
Watch out for fees. Some cards may have an annual fee, so you’ll want to make sure you can afford that fee and that it’s worth the rewards you’re getting in return.
Research methodology
We analyzed over 1,600 rewards credit cards and most heavily weighed 10 factors to identify the best cards for your lifestyle – these factors and more inform our decisions in which cards can work the hardest for you.
Rewards rate – We took into account rewards categories and rates, earning caps and other fine print that may affect total earnings potential.
Interest rate – Though you shouldn’t have to worry about interest rates if you’re paying your bill in full each month, we excluded rewards cards with exorbitant interest rates.
Fees – We compared each card’s fees to the rewards rate and sign-up bonus to determine whether the average consumer could earn enough rewards to justify the annual fee within the first year and years to come.
Travel benefits – For the travel cards, we’ve assessed point values and transfer partners to help you weigh your options based on your lifestyle and goals.
All criteria used: Credit needed, rates & fees, transfer partners, travel benefits, point values, redemption options and flexibility, customer service, sign-up bonus, rewards rate.
Editor’s takes: The best rewards credit cards
American Express® Gold Card
Best for introductory bonus
The annual fee isn’t chump change, but it can be worth it for travel and dining buffs. A rate of 4 points per dollar at restaurants worldwide is one of the best you’ll find in that category. You’ll also earn that rate on purchases at U.S. supermarkets (on up to $25,000 in purchases per calendar year, then 1 point per dollar) and on Uber Eats purchases. Plus, the welcome offer is enough to make up for the cost of the annual fee for the first year or longer, depending on how you redeem it. Read the full American Express Gold Card review.
Rewards rate: 4X Membership Rewards® Points on Restaurants worldwide, including takeout and delivery and Uber Eats purchases. Also, earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
Annual fee: $250
Welcome offer: Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months.
Chase Freedom Unlimited®
Best for cash back at drugstores
If you’re looking for a card that rewards everyday expenses, you’ll see several cards that offer rewards for grocery store and gas station purchases. But the Chase Freedom Unlimited® is unique because it offers 3% cash back on drugstore purchases, a somewhat rare category. In addition to the rewards you’ll earn at drugstores, you also have the opportunity to earn cash back on dining and travel purchased through Chase Ultimate Rewards®. Plus, general purchases earn 1.5% cash back. With so many rewards categories, it’s pretty amazing that there’s no annual fee. Read the full Chase Freedom Unlimited review.
Rewards rate: Earn 5% on travel purchased through Chase, 3% on dining at restaurants and drugstores, and 1.5% on all other purchases.
Annual fee: $0
Sign-up bonus: Earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening.
Bank of America® Cash Rewards credit card
Best for flexible cash back categories
This cash back card offers something truly unique: you get to pick and change your bonus cash back category as often as once per calendar month. You can choose from gas, dining, travel, online shopping, drug stores and home improvement/furnishings. With this freedom, you’re able to maximize your rewards by selecting your categories according to the purchases that are on your horizon. Read the full Bank of America Cash Rewards credit card review.
Rewards rate: Earn 3% cash back in the category of your choice and 2% cash back at grocery stores and wholesale clubs (on up to $2,500 in combined choice category/grocery store/wholesale club quarterly purchases, then 1%.
Annual fee: $0
Sign-up bonus: $200 online cash rewards bonus after you make at least $1,000 in purchases in the first 90 days of account opening
Blue Cash Preferred® Card from American Express
Best for U.S. supermarkets
This card’s cash back categories – U.S. supermarkets and gas stations – will benefit nearly every consumer. However, the annual fee of $95 may give you pause, even if it is waived the first year. If that’s the case, consider its little sister card, the Blue Cash Everyday® Card from American Express. Check out our side-by-side comparison of the Blue Cash Everyday and Blue Cash Preferred if you’re not sure which card makes the most sense for you. Read the full Blue Cash Preferred Card from American Express review.
Rewards rate: 6% cash back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%), 6% cash back on select U.S. streaming subscriptions, 3% cash back at U.S. gas stations and on transit, and 1% cash back on other purchases.
Annual fee: $95, waived first year
Welcome offer: Earn a $300 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months.
Capital One Quicksilver Cash Rewards Credit Card
Best for intro APR period on purchases
With the Quicksilver, you can get 0% intro APR for 15 months on purchases (then it’s 15.49%-25.49% variable). That means if you have a pending renovation or major appliance purchase, the Quicksilver can help you pay strategically. However, you should remember that this only applies to purchases made with the card; there is no 0% intro APR offer for balance transfers. Your first few months are made even more valuable by the easy-to-attain welcome bonus. Aside from the new cardholder benefits, the ongoing value of the rewards rate is good, too. Read the full Capital One Quicksilver Cash Rewards Credit Card review.
Rewards rate: Earn unlimited 1.5% cash back on every purchase.
Annual fee: $0
Sign-up bonus: Earn a one-time $200 cash bonus after you spend $500 on purchases within 3 months from account opening.
Discover it® Cash Back
Best for rotating cash back categories
This card offers a great mix of bonus spending categories, which you can find on Discover’s 2021 cash back calendar. From April 1 through June 30, 2021, you’ll earn 5% cash back at wholesale clubs, gas stations and select streaming services (upon enrollment, on your first $1,500 in combined quarterly spending, then 1%). Other 2021 bonus categories are in line with the previous year, featuring restaurants and PayPal in summer followed by Amazon.com, WalMart.com and Target.com during the holidays. While these rates are lucrative enough to stand on their own, Discover sweetens the deal by matching all the cash back you earn at the end of your first year. One potential drawback for those who prefer to set it and forget it: You must remember to enroll each quarter when the bonus category changes if you want to earn the boosted cash back rate. Read the full Discover it Cash Back review.
Rewards rate: Earn 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and when you pay using PayPal, up to the quarterly maximum when you activate, then 1%.
Annual fee: $0
Sign-up bonus: Discover will automatically match all the cash back you’ve earned at the end of your first year – no limits or minimums.
The Platinum Card® from American Express
Best for luxury travel benefits
The first thing you might notice about this card is the startling $550 annual fee. But for frequent travelers, especially those who like to travel in style, the long list of rewards, benefits and credits can easily make up that value. To start, flights booked directly with airlines or with American Express Travel earn 5x points (starting January 1, 2021, earn 5x points on up to $500,000 of these purchases per calendar year). The same 5x rate applies to prepaid hotels booked with American Express Travel. Cardholders also have access to a wealth of annual credits: up to $200 in Uber credit, up to $100 Saks Fifth Avenue credit (enrollment required) and up to a $100 hotel credit for qualifying activities through The Hotel Collection. Every four years, cardholders get a $100 Global Entry or $85 TSA PreCheck® credit. Read the full review of The Platinum Card® from American Express.
Rewards rate: Earn 10x points on eligible purchases on your new Card at U.S. Gas Stations and U.S. Supermarkets, on up to $15,000 in combined purchases, during your first 6 months of Card Membership. Starting January 1, 2021, earn 5X Membership Rewards® Points for flights booked directly with airlines or with American Express Travel (on up to $500,000 on these purchases per calendar year). Also earn 5X Membership Rewards® Points on prepaid hotels booked with American Express Travel.
Annual fee: $550
Welcome offer: Earn 75,000 Membership Rewards® Points after you spend $5,000 on purchases on your new Card in your first 6 months of Card Membership.
Bank of America® Premium Rewards® credit card
Best for Global Entry/TSA PreCheck credits
This flat-rate rewards credit card from Bank of America combines the popular features of a cash back credit card, including unlimited earnings and flexible redemption options, with competitive travel benefits, including up to $100 in Airline Incidental Statement Credits annually and up to $100 in statement credits for TSA PreCheck/Global Entry every four years. Read the full Bank of America® Premium Rewards® credit card review.
Rewards rate: Earn 2X points on travel and dining purchases, and 1.5X points on all other purchases.
Annual fee: $95
Sign-up bonus: Earn 50,000 bonus points after you spend at least $3,000 in purchases in the first 90 days of account opening, a $500 value.
Chase Freedom Flex℠
Best for combining rotating cash back and flat-rate spending
Indecisive? The Chase Freedom Flex gives you the best of both worlds when it comes to cash back. Earn 5% cash back on quarterly categories for up to a combined $1,500, then earn a flat rate of 5% on travel purchases made through Chase and 3% cash back at restaurants and drug stores. The sign-up bonus is quite valuable for such a low spend, too. Read the full Chase Freedom Flex review.
Rewards rate: Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate, plus 5% cash back on travel purchased through Chase and 3% cash back at restaurants and drugstores.
Annual fee: $0
Sign-up bonus: Earn a $200 bonus after you spend $500 on purchases in your first 3 months from account opening.
Capital One SavorOne Cash Rewards Credit Card
Best for dining and entertainment
The SavorOne’s 3% cash back on dining and entertainment is highly competitive, especially for a no-annual-fee card. You’ll also earn 2% cash back at grocery stores, a nice touch of practicality to complement the dining and entertainment categories. While this is a strong no-annual-fee cash back card, it may not make sense for the ultra-frugal consumer. If you’re trying to cut back on eating out, as many people do when budgeting, you miss out on the card’s most lucrative rewards category. If you’d like to earn rewards for cooking meals at home, you can find higher rewards rates with the Blue Cash Everyday. Read the full Capital One SavorOne Cash Rewards Credit Card review.
Rewards rate: Earn unlimited 3% cash back on dining and entertainment, 2% at grocery stores, 1% on all other purchases.
Annual fee: $0
Sign-up bonus: Earn a one-time $200 cash bonus after you spend $500 on purchases within the first 3 months from account opening.
Citi Premier® Card
Best for hotel rewards
Cardholders earn 3 points for every dollar spent at restaurants, gas stations, supermarkets, air travel and hotel bookings. Accommodation is often the most expensive part of a vacation, so using your Citi Premier Card to pay for hotel stays is a great way to earn a significant amount of rewards with one purchase. Plus, the stack of ThankYou points you can earn with the sign-up bonus can be redeemed for travel, statement credits, gift cards and more. The annual fee does cut into the overall value, but frequent travelers can make up that cost and more with regular card use. Read the full Citi Premier Card review.
Rewards rate: Earn 3 Points per dollar spent at restaurants, supermarkets, gas stations, and on air travel and hotels. Earn 1 Point per dollar spent on all other purchases.
Annual fee: $95
Sign-up bonus: Earn 60,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening.
Blue Cash Everyday® Card from American Express
Best for low interest
In most cases, you should only get a rewards credit card if you know you’re able to pay off your bill in full each month. But even if you’re pretty sure that’s the case, it’s good to have a card that charges a reasonable interest rate just in case you do end up carrying a balance. The Blue Cash Everyday offers just that, with an APR of 13.99% – 23.99% variable. There’s plenty to love about the rewards system, too. Read the full Blue Cash Everyday Card from American Express review.
Rewards rate: 3% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%), 2% cash back at U.S. gas stations and at select U.S. department stores and 1% cash back on other purchases.
Annual fee: $0
Welcome offer: Earn $200 back after you spend $1,000 in purchases on your new Card within the first 3 months.
Bank of America® Travel Rewards credit card
Best for travel rewards flexibility
Many travel credit cards require you to redeem your rewards through an issuer portal, which can be restrictive and inconvenient for some. The Bank of America Travel Rewards credit card opens your options by allowing you to redeem points for a statement credit on travel purchases made on your card within the last 12 months. That means you can travel now and settle up your rewards redemption later. Plus, this gives you the option to use your points to pay for travel booked through third-party travel sites, giving you more flexibility to choose the best deal. Read the full Bank of America Travel Rewards credit card review.
Rewards rate: Earn unlimited 1.5 points per $1 spent on all purchases
Annual fee: $0
Sign-up bonus: 25,000 online bonus points after you make at least $1,000 in purchases in the first 90 days of account opening.
Capital One Venture Rewards Credit Card
Best for travel rewards
There’s a reason the Venture card is revered by travel enthusiasts; with an excellent rate of 2X miles on every purchase, the Venture Rewards Card allows you to rack up miles without worrying about spending categories. Additionally, the sign-up bonus is one of the best. Lastly, but certainly not to be overlooked, is the Venture’s redemption flexibility. In addition to the wealth of transfer partners, there are no blackout dates. Read the full Capital One Venture Rewards Credit Card review.
Rewards rate: Earn an unlimited 2X miles on every purchase.
Annual fee: $95
Sign-up bonus: Earn 100,000 bonus miles when you spend $20,000 on purchases in the first 12 months from account opening, or still earn 50,000 miles if you spend $3,000 on purchases in the first 3 months
Understanding rewards credit cards
What is a rewards credit card?
A rewards credit card is a lending product that gives you points, miles or cash back for your spending. You might get rewards for specific types of purchases, or you might get a flat rate for all expenditures. Typically, you’ll need at least good credit to be approved for a rewards credit card, though there are exceptions.
A 2020 Bankrate survey found that 59% of Americans carry at least one rewards credit card. If you’re part of the 41% not earning rewards, that’s money left on the table.
How do rewards credit cards work?
As you make purchases with a rewards credit card, you’ll get a little something in return, usually cash back, points or airline miles. Depending on the type of rewards card you have, you can redeem your earnings for money deposited into your bank account, free or discounted flights, hotel stays, gift cards and more.
What you can do with your rewards depends on what type of card you have. Cash back gives you the most flexibility with your rewards. Since you’ll typically get cash back as a statement credit or direct deposit, you can use your rewards like cash to buy anything you want. On the other hand, travel rewards can be used to book flights, hotels and other types of travel.
What determines which purchases qualify for bonus rewards?
Say your credit card offers 3% cash back at restaurants. You might wonder what qualifies as a restaurant. Do breweries, food trucks and fast food chains count?
When calculating the rewards you’ve earned from a purchase, credit card companies look at the business instead of the actual item you’ve purchased. Payment networks like Visa and Mastercard categorize businesses using merchant category codes, which give businesses a label, such as “grocery store” or “restaurant.” So buying a loaf of bread at a gas station would not typically register as a grocery purchase, but rather, a gas station purchase.
Because each payment network assigns an MCC, one business may have several MCCs between the major payment networks. You can find a business’s merchant category code in several ways. If you’re a Visa cardholder, you can look it up online with their supplier locator tool. If your card uses a different Network, like Mastercard or American Express, you’ll have to call your issuer or check your statement after making a purchase.
Types of rewards cards
The two main types of rewards cards are cash back and travel cards. Both types of cards can help you earn rewards through the everyday purchases you make or the flights you’re already booking. Although this sounds simple enough, it can be confusing when trying to find the right card for you because there are so many to choose from within each category. So to make it a little easier for you, we’ve gone into detail about the different types of rewards credit cards and what they can offer you:
Cash back cards
With a cash back credit card, a percentage of each qualifying purchase will be paid back to you. For example, a card with a 2% cash back rate would reward you with $2 for every $100 spent.
This can be a great way to earn money for the purchases you make every day. With the right card, the rewards won’t expire for the life of the account – so the cash back that you earn will always be yours. There are several types of cash back credit cards.
Flat-rate cash back cards. These are the simplest type of rewards cards, offering the same rate of cash back on all purchases, usually between 1% and 2%. This is a great choice for someone who has a wide variety of expenses or doesn’t want to have to remember bonus categories. A flat-rate card can also be a good choice if you only want one credit card to use for everything. A great option: the Citi® Double Cash Card, which essentially offers 2% cash back on all purchases excluding gift cards, (1% as you buy, 1% as you pay off your purchases).
Tiered cash back cards. Tiered bonus category cards reward specific spending categories, such as dining or gas, at a higher rate, while all other purchases will typically earn 1% cash back. This is a great choice for those who have recurring, significant expenses in certain categories. A great option: the Capital One Savor Cash Rewards Credit Card, which offers 4% cash back on dining and entertainment purchases, 2% cash back at grocery stores and 1% on all other purchases.
Rotating category cash back cards. Similar to tiered cards, rotating category cards offer boosted rewards rates in certain categories. However, the bonus categories change, usually each quarter, and are often seasonally relevant. Those who want to capitalize on seasonal expenses, such as online shopping during the holidays or travel during the summer, might consider a rotating category card. A great option: the Discover it® Cash Back card, which is offering 5% cash back at grocery stores, Walgreens, and CVS purchases from January through March 2021 on up to $1,500 in purchases quarterly after activating (then 1%), right on time for holiday gift purchases. Quarterly sign-up required.
Redeeming cash back
When you redeem your cash back, you probably won’t receive it in the form of physical cash. Most cash back cards offer the option to redeem in a few different ways.
One of the most common options, statement credits, lower your credit card account balance. For example, if you redeemed $20 of cash back as a statement credit, your $500 credit card bill would decrease to $480.
You may also be able to redeem your cash back as a gift card, check or direct deposit to your bank account.
Travel credit cards reward cardholders with points or miles instead of cash. What’s great about travel credit cards is that you don’t always have to be a frequent traveler to earn significant travel rewards. You can choose a credit card that awards points and miles for purchases like flights, hotels and transportation, or you can choose a card that rewards general, everyday purchases.
You can redeem points or miles to book travel, and with some travel rewards cards, you’ll gain access to luxurious perks like airport lounge access. Among the best travel credit cards, you’ll also find perks like free companion passes, free checked bags, TSA PreCheck® credits and more. There are three main types of travel credit cards.
Types of travel rewards cards
General-purpose travel cards. With a general-purpose travel card, you’ll earn points, which can be redeemed for flights or hotel stays. General-purpose cards are the most flexible type of travel credit card because they allow you to redeem with a variety of partner brands, so you’re not tied to one airline or hotel chain. Also, many general-purpose travel credit cards reward you with an extra boost in your points if you redeem through the issuer-specific redemption portal, rather than transferring your points to an airline or hotel loyalty program. A great option: the Chase Sapphire Preferred® Card, which rewards cardholders with 2X points on travel and at restaurants.
Airline credit cards. Airline credit cards reward cardholders with miles for a specific airline. You earn those miles at a boosted rate through spending on flights or other categories, such as gas stations or dining. If you’re loyal to one brand, you’ll likely find your best redemption value with an airline card instead of a general-purpose card. A great option: the Delta Skymiles® Gold American Express Card, which offers 2X miles on Delta purchases, at restaurants worldwide and at U.S. supermarkets.
Hotel credit cards. Hotel credit cards, like airline cards, are co-branded and encourage loyalty to a single brand. As rewards stack up, you can earn free nights and become eligible for room upgrades, free breakfast and status boosts. A great option: the Hilton Honors American Express Surpass® Card.
Redeeming travel rewards
In the world of travel rewards, redemption options vary greatly from card to card.
General-purpose travel cards usually have the most flexible redemption options. Some allow you to pay for travel ahead of time using the issuer’s website. Others let you use your points to pay for travel purchases you’ve recently made, effectively lowering your account balance. Lastly, some travel credit cards give you the option to transfer your rewards to an airline or hotel loyalty program.
Airline credit cards typically offer rewards in the form of miles with a particular airline, like United or American Airlines. You can then redeem your miles for free or discounted flights through your airline loyalty program account.
Hotel credit cards are like airline cards in that they typically are associated with a particular brand, like Marriott or Hilton. You can usually redeem your points for free nights and perks like room upgrades and late checkout.
How much are travel rewards points worth?
Unlike cash back, the value of a point or mile isn’t always straightforward. It can depend on how you redeem your rewards, fluctuating flight or hotel prices and a number of other factors. That said, some rewards points or miles are generally worth more than others.
Gas: Gas cards can reward you generously for each gallon and sometimes only require fair credit. You can get a credit card that rewards purchases at any gas station, or one that rewards purchases at a specific gas station chain. A great option: the Wells Fargo Propel American Express® card.
Retail: Sometimes called a co-branded card, this product is a type of loyalty card that is tied to department stores or other store brands. These cards can offer high percentages of cash back for first purchases and more. A great option: the Amazon Prime Rewards Visa Signature card, which offers rewards on Amazon Prime and Whole Foods purchases.
Business: Many card issuers offer varying types of business cards, frequently with greater rewards than consumer rewards cards. You can get cash back or points for business-related spending, as well as money-saving perks and benefits. A great option: the Ink Business Unlimited® Credit Card, which rewards cardholders with 1.5% cash back on all purchases. If you often spend on business items, a business card might be an option.
Your first decision will likely be between cash back, points and airline miles. For some people, cash deposited directly into their bank account is the most satisfying form of credit card rewards. Others might be more jazzed up about putting their earnings toward a flight or hotel. Maybe you want both, in which case it isn’t a bad idea to have more than one rewards card.
After choosing a type of rewards, you can decide how you want to earn your preferred rewards. To maximize your earnings, you should pick a card with rewards categories that make up a significant portion of your budget each month. If you don’t want to keep track of categories or if you plan to use the card for a variety of expenses, a flat-rate card can be valuable, too.
Once you know what you want – say, a card that earns travel rewards on every purchase – you’ll have a few solid options to choose from. At this point, you can start to consider the cards’ other features.
There’s more to a rewards card than its rewards rate. When making your decision, you should consider additional perks, as well as rates or fees that may detract from your rewards earnings.
Annual fee. There are plenty of solid rewards cards, often cash back cards, that charge no annual fee. On the other hand, travel rewards cards and cards with exceptionally high rewards rates or sign-up bonuses typically do charge an annual fee. If the card you’re eyeing comes with an annual fee, you should do some quick math to make sure that your yearly rewards earnings will be greater than the cost of the fee.
Additional benefits. Rewards cards often offer perks just for having the card. For example, many travel cards offer benefits like credits for TSA PreCheck® or Global Entry, airport lounge access and free checked bags. If you’re torn between two cards or on the fence about whether an annual fee is worth it, perks like these can tip the scale in one direction.
Sign-up bonus. Most rewards cards offer some kind of incentive to new cardholders who spend a certain amount on their card within a specified time frame. You might get a few hundred dollars in cash back or a chunk of points you can redeem for a free flight. Though valuable, a sign-up bonus is a one-time perk. Make sure the long-term value checks out, too.
Ongoing APR. If you’ll be carrying a balance from month to month, you’re probably better off forgoing rewards and getting a low interest credit card. That said, accidents and emergencies happen, even to those who usually pay their balance in full. Choosing a rewards card with a lower interest rate can save you money if you need to carry a balance someday. If you’re curious about how your card’s APR might affect your bottom line, read our guide to credit card interest.
Introductory APR. If you’ve got a large purchase planned or want to transfer and pay off some debt, you might benefit from an introductory APR period. Some rewards cards offer new cardholders an introductory 0% interest rate on purchases or balance transfers for a certain number of months. Check out our payoff calculator to help you estimate how long it will take you to pay down your existing balance.
With the right credit card, you can be rewarded for the purchases you’re already making regularly. If you spend within your means and pay off your balance each month, a rewards card can easily be worth your while. That said, they aren’t for everyone.
To help you decide whether a rewards card is right for you, we’ve compiled a list of benefits and drawbacks.
Pros
Accrue points, miles or cash: You could earn rewards worth hundreds of dollars a year or more without altering your spending habits.
Travel and shopping perks: Rewards cards can offer extended warranties, rental car insurance, travel credits and other money-saving benefits.
Build credit: Like most credit cards, rewards cards offer the opportunity to build your credit, provided you pay on time each month.
Fees waived: In the case of the best travel credit cards, many have no foreign transaction fees and may even waive the annual fee the first year. With some cash back cards, you may not pay an annual fee at all.
Cons
Higher credit score required: While there are credit-builder cards that have rewards, the cards with richer offers tend to require higher credit scores. Make sure you check a card’s credit score requirement before applying. Read our full guide for tips on how to apply for a credit card and get approved.
They can cost you time: Many rewards cards can require you to spend some time maximizing points or cash. For example, if it’s a card with rotating categories, you need to sign up for categories, then make sure you maximize spend without going over budget. And some travel cards have blackout dates and limit your choice in travel partners. However, there are rewards cards with flat rates if you don’t want to invest time in your rewards.
Damage credit/budget: While you can improve your score with each month of on-time payments, you can damage it with high balances. Also, you can blow your budget if you don’t pay attention to your spending, as well as undo any earnings you’ve made through rewards.
Higher interest rates: Interest rates on rewards cards tend to be higher, particularly travel cards. But if you plan to pay in full each month, that shouldn’t be a problem. In our rewards survey, only 41% of consumers said they pay off their rewards card each month.
How to maximize credit card rewards
To take full advantage of your rewards, you need to look at the card from all angles, including how much you’ll spend and what you’ll buy.
For advice on the most important considerations, we reached out to money-saving expert Andrea Woroch, whose advice has been featured in such media as Time’s Next Advisor, Huffington Post and The New York Times. Here are Woroch’s top tips for maximizing your credit card rewards.
Match your spending style
“Credit card companies offer all types of reward options these days, from points to miles to cash back, and each card provides incentives based on certain purchases or stores/retailers, so it’s important to find the card that rewards you for the purchases you make the most,” said Woroch.
For example, a rewards rate of 3X points on travel purchases is great – but only if you regularly spend a significant amount of money on travel. The best rewards card for you will match the way you already spend.
Snag a cash sign-up bonus
“When signing up for a new card, look for one that offers a cash bonus so you get something extra for the purchases you’re planning to make anyway,” Woroch said. “For instance, the Chase Freedom Unlimited® offers $200 when you spend $500 in first 3 months from opening the account. If you use the card to pay utilities, groceries and other everyday purchases, it’s a no-brainer to take advantage of this deal and use the money for a special purchase or put it toward statement credit to pay down the balance.”
On the flip side, she warns that there are dangers to chasing sign-up bonuses.
“Just make sure that it’s feasible to reach the cash sign-up bonus and that you aren’t chasing the reward by making extra, unnecessary purchases. If a card requires you to spend $3,000 in the first 3 months and you don’t have any big-ticket planned purchases, then you’re less likely to reach that amount and you may spend more unnecessarily for the rewards.”
In a best-case scenario, using a rewards credit card can be a great way to earn cash back or discounted travel at no cost to you. In that case, a rewards credit card is worth having. However, several criteria must be true if you want your rewards credit card to be worth it:
You spend responsibly and within your means. Adopting a “buy now, pay sometime in the future” mentality may make it easy to overspend. It’s important to think of credit card charges in the same way as debit charges – once you swipe, that money is gone.
You pay your balance in full. If you aren’t able to do this, you probably shouldn’t use a rewards credit card. The interest charges you’ll accrue will likely be greater than any rewards earnings. If you’re going to carry a balance, it’s better to get a low interest credit card.
You only get a card with an annual fee if the rewards and benefits make up for it. There are plenty of lucrative rewards cards that don’t charge an annual fee, with which you’ll never have to worry about recouping that yearly expense. If you’ve got your eye on a card with an annual fee, break down your monthly budget and estimate how much you’ll earn in rewards annually. If you’re confident you can achieve the rewards earnings each year to surpass the cost of the annual fee, it would probably be worth it. You should also weigh the value of money-saving perks and benefits, like a TSA PreCheck credit or a free checked bag.
Are rewards cards with annual fees worth it?
As you do your research, you may start to notice that the cards with the best rewards earnings and benefits usually charge an annual fee, especially travel rewards cards. Is paying the annual fee worth it? In short, a credit card with an annual fee is worth it if the value of your annual rewards earnings plus any additional perks is greater than the cost of the fee.
But how do you estimate a card’s value before applying? For cash back cards, it can be as simple as doing a quick calculation using some estimates.
For this example, we’ll assess the value of the Blue Cash Preferred® Card from American Express for someone who spends $2,400 each year on gas and $4,800 each year on groceries.
Credit card
Ongoing Annual fee
Rewards rate
Annual earnings breakdown
Worth it?
The Blue Cash Preferred® Card from American Express
$95*
6% cash back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%). 3% cash back at U.S. gas stations
($4,800 x .06) + ($2,400 x .03) = $360
Yes. After subtracting the $95 annual fee, this person’s rewards earnings would be $265.
*Note: The annual fee is waived for the first year on the Blue Cash Preferred, $95 thereafter.
With travel cards, it may be a bit more difficult to calculate value, since rewards come in the form of points or miles, rather than cash back. You’ll want to do your research to determine how far you can stretch your points with that card’s particular loyalty program. The Points Guy’s monthly point valuations take some of the heavy lifting out of this research so that you can compare loyalty programs apples-to-apples.
Let’s try calculating the value of a popular travel rewards card, the American Express® Gold Card. In this scenario, we’re calculating the earnings of someone who annually spends $4,800 at U.S. supermarkets, $1,500 at restaurants worldwide, and $1,000 on flights. American Express Membership Rewards points are valued at 2 cents apiece.
Credit card
Annual fee
Rewards rate
Annual earnings breakdown
Worth it?
American Express® Gold Card
$250
4X points on dining and at U.S. supermarkets (on up to $25,000 in purchases per year, then 1X). 3X points on flights booked directly with airlines or on amextravel.com.
($4,800 x 4) + ($1,500 x 4) + ($1,000 x 3) = 28,200 points = $564
Yes. After subtracting the $250 annual fee, this person’s rewards earnings would be $314.
You’ll also want to consider other factors aside from rewards earnings. Maybe you determine that you’ll just break even between rewards earnings and the annual fee. Consider the additional perks the card offers. Maybe the benefit of airport lounge access, free checked bags or a TSA PreCheck or Global Entry credit is where you find the most value.
Whether the annual fee will be worth it depends on your spending habits, so it’s important to be honest with yourself and choose a card that matches how you already spend or plan to spend. If you aren’t sure, many issuers allow the option to upgrade a card in the future, so you can always start with the no annual fee version and trade up later.
The best rewards credit card programs
You can compare individual credit cards endlessly, but knowing a little bit about each issuer’s rewards program can help you narrow your search. Credit card rewards programs come in any number of flavors, and one of them is bound to work well for you. Just remember that not every credit card from an issuer will qualify for their rewards program.
Earn points by using your credit card or shopping on the Earn More Mall® site.
No option to transfer points to airlines or hotels, but you can redeem them in a variety of ways, including cash back, travel, gift cards, statement credits and merchandise.
4X Membership Rewards® at Restaurants, U.S. Supermarkets, and on Uber Eats purchases
Up to $25,000 per calendar year in purchases at U.S. Supermarkets, then 1X. Earn 3X Membership Rewards® points on flights booked directly with airlines on amextravel.com
3% cash back on a category of choice
2% cash back on grocery stores and wholesale club purchases ($2,500 combined limit on 2% and 3% categories each quarter), 1% cash back on other purchases
6% cash back at U.S. supermarkets
(up to $6,000 in purchases per year, then 1%), 6% cash back on select U.S. streaming subscriptions, 3% cash back at U.S. gas stations and on transit, 1% cash back on general purchases
5X on flights booked directly with airlines or with American Express Travel
Starting 1/1/21, earn 5X points on up to $500,000 on these purchases per calendar year
The value of credit card rewards points depends on how you redeem them. For example, you might get a value of 1 cent per point when redeeming for travel on the issuer’s website. However, you may have the option to transfer your points to an airline, in which case your points may stretch further, making them worth 1.5 or 2 cents apiece. You also may have to option to redeem points for gift cards or cash back. To get the best value from your points, you’ll have to compare your options and do some quick math.
Your point-earning potential depends on two things: how much you spend on the card and whether it offers unlimited rewards. Some cards set no limit to the number of points you can earn at a boosted rate, while others might decrease your rewards rate after you hit a certain spending threshold. For example, you might earn 2X points on all purchases on the first $5,000 spent annually, then 1X on purchases after that.
The answer depends on your spending habits and how you want to redeem your rewards. Cash back cards are good for those who wish to simply press a button to redeem their rewards for cash. It’s also less common for cash back cards to charge an annual fee, another perk for those who like to keep it simple. On the other hand, travel rewards cards typically offer more bang for your buck in terms of rewards value. However, redeeming your travel rewards may require some extra research and comparison in order to get the best value. Read our full comparison of cash back and travel rewards.
Most rewards cards require at least good credit, which is a FICO® score of 670 or greater. With very good or excellent credit, you’ll likely have access to the best rewards credit cards. There are some credit cards for bad credit that offer modest rewards, like the Discover it® Secured Credit Card, which offers 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases per quarter, then 1%, as well as 1% cash back on all other purchases.
You’ll earn rewards by using your credit card. For most credit cards, you can expect to earn at least 1% cash back or 1 point per dollar spent on all purchases. That would mean that, for every $100 you spend on your card, you would earn $1 in cash back or 100 points.
However, that’s just a baseline – many credit cards offer better rewards rates. For example, plenty of cards offer 1% or 1X points per dollar spent on general purchases, plus boosted rewards rates on particular types of purchases, like groceries or travel.
Whether you are redeeming cash back, points or miles, card issuers usually offer numerous ways to cash out. You can redeem through statement credits, gift cards, even checks. Here are a few common ways to redeem credit card rewards:
A travel portal. With general-purpose travel cards, you can redeem your miles for all manner of travel through a portal that monitors your rewards and travel spending. With some cards such as the Chase Sapphire Preferred® Card and Chase Sapphire Reserve, you’ll get boosted value for using the portal to book rewards travel.
Redeeming for specific brands. With hotel- and airline-branded cards, you can redeem for those specific brands and sometimes their partners.
Online shopping. Redeem your points through a shopping portal for such items as clothing, health and beauty aids, gift cards, and more.
Get a check. A few card issuers will issue a check for your cash rewards.
Direct deposit into a bank account. This is a great option for Bank of America Preferred Rewards clients.
Statement credit. A favorite among cashback cards, you can earn your redemption through a credit that is placed on your card statement.
About the Author
Tracy Stewart
Tracy Stewart is a personal finance writer specializing in credit card loyalty programs, travel benefits, and consumer protections. He previously covered travel rewards credit cards, budget travel, and aviation news at SmarterTravel Media. His money-saving tips have appeared in the Washington Post, the Wall Street Journal, Consumer Reports, MarketWatch, Vice, People, the Zoe Report and elsewhere.
About the Editor
Jeanine Skowronski
Jeanine Skowronski is a credit card expert, analyst, and multimedia journalist with over 10 years of experience covering business and personal finance. She has previously served as the Head of Content at Policygenius, Executive Editor of Credit.com, Deputy Editor at American Banker, Staff Reporter at TheStreet and a columnist for Inc. Magazine. Her work has also been featured in The Wall Street Journal, Fox Business, Business Insider, U.S. News & World Report and more.
About the Reviewer
Brady Porche
Creditcards.com Managing Editor Brady Porche has helped consumers make smart credit card choices for over five years. Focused on breaking industry news and personal finance education, Brady specializes in credit scores, card rewards, debt management and data security.
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