Using a rewards credit card is an easy way to get a return on your everyday expenses. If you’re already going to the grocery store or filling up your gas tank, why not earn cash back or travel points on those purchases? If you can spend responsibly and pay your bill on time, a rewards card will likely be a valuable addition to your wallet.
With so many options, choosing a rewards credit card can be daunting. Our team of experts analyzed 1,640 rewards credit cards to give you our top picks, so you can safely apply for the best rewards credit card for your goals. Check out the best rewards credit cards from our partners below.
Using a rewards credit card is an easy way to get a return on your everyday expenses. If you’re already going to the grocery store or filling up your gas tank, why not earn cash back or travel points on those purchases? If you can spend responsibly and pay your bill on time, a rewards card will likely be a valuable addition to your wallet.
With so many options, choosing a rewards credit card can be daunting. Our team of experts analyzed 1,640 rewards credit cards to give you our top picks, so you can safely apply for the best rewards credit card for your goals. 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.
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 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
14.99% - 22.99% Variable APR on purchases and balance transfers
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.
Plus members earn 3% back on eligible purchases when shopping in-club or digitally through Sam’s Club when they use their Sam’s Club Mastercard and another 2% back from their Plus membership, for a total of up to 5% rewards on eligible purchases.
3%
3% cash back on dining and takeout
1%
1% cash back on all other eligible purchases.
At A Glance
Intro Bonus
$30
Get a $30 Statement Credit when you open a new account and make $30 in Sam's Club purchases within 30 days
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 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 on amextravel.com.
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.
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. This does not mean to spend carelessly, as it is important to take note of required payments and interest rates, as well as limits on rewards categories. When used properly, you can earn rewards in various ways, such as cash back, travel points/miles, and even hotel amenities 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 this 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 is worth the rewards you are getting back from the card.
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
Our pick for introductory bonus
The $250 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, if you spend $4,000 in the first 6 months, you’ll earn 60,000 points – enough to make up for the annual fee for the first year or longer, depending on how you redeem it. Read the full review.
Bank of America® Cash Rewards credit card
Our pick 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. In addition to 3% cash back in your category of choice, you’ll also earn 2% cash back at grocery stores and wholesale clubs (you’ll earn 3% and 2% cash back on the first $2,500 in combined choice category/grocery store/wholesale club purchases each quarter. After that it’s 1%). Read the full review.
Chase Freedom Unlimited®
Our pick 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. It doesn’t end there; there are ample opportunities to earn rewards. In addition to the rewards you’ll earn at drugstores, you also have the opportunity to earn 3% cash back on dining at restaurants, including takeout and eligible delivery services, and 5% cash back on all travel purchased through Chase Ultimate Rewards®. All other purchases earn 1.5% cash back. With so many rewards categories, it’s pretty amazing that there’s no annual fee. Read the full review.
Discover it® Cash Back
Our pick 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. You’ll earn 5% cash back in these rotating categories (upon enrollment, on your first $1,500 in combined quarterly spending, then 1%). While that rate is lucrative enough to stand on its 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 and forget: 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 review.
Bank of America® Travel Rewards credit card
Our pick 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 purchase 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. With no annual fee and a rewards rate of 1.5 points per dollar on every purchase, this is a solid choice for casual travelers. Read the full review.
Blue Cash Everyday® Card from American Express
Our pick 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 that 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. Cardholders earn 3% cash back at U.S. supermarkets (up to $6,000 per year in purchases, then 1%) and 2% cash back at U.S. gas stations and at select U.S. department stores. Read the full review.
Blue Cash Preferred® Card from American Express
Our pick for U.S. supermarkets
This card’s 6% cash back at U.S. supermarkets (on up to $6,000 in purchases per year, then 1%) and 3% back at U.S. gas stations and transit will benefit nearly every consumer. Plus, it isn’t difficult to achieve the introductory bonus – $300 after spending $3,000 within the first 6 months. However, the annual fee of $95 may give you pause, although it is waived the first year. You can also check out 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 review.
Capital One Quicksilver Cash Rewards Credit Card
Our pick 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 welcome bonus, $200 after you spend just $500 within the first 3 months. Aside from the new cardholder benefits, the ongoing value is good, too. You’ll earn 1.5% cash back on all purchases – no need to keep track of bonus categories. Read the full review.
Capital One Venture Rewards Credit Card
Our pick 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: 60,000 miles after a $3,000 spend within the first 3 months. 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 review.
Chase Freedom Flex℠
Our pick 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 Freedom Flex also offers $200 to those who spend $500 within the first 3 months. Read the full review.
Sam’s Club® Mastercard®
Our pick for gas
For many people, gas is one of those unavoidable, perpetual expenses. For that reason, choosing a credit card that rewards gas purchases is one of the best ways to ensure you’re continuously earning rewards. With the Sam’s Club Mastercard, you’ll earn 5% cash back every time you fill up your tank (on up to $6,000 annually, then 1%). You’ll also earn 3% cash back on dining. There are several limitations, though. First, rewards earnings are capped at $5,000 annually and come in the form of a check that can only be cashed at a Sam’s Club. You only receive your rewards once per year (in February), and the check will expire 180 days from the issue date. If you’re a regular Sam’s Club shopper, this may not be a problem. But those seeking more freedom can find better gas rewards cards. Read the full review.
Citi Premier® Card
Our pick 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, if you spend $4,000 within the first 3 months, you’ll receive 60,000 ThankYou points, which can be redeemed for travel, statement credits, gift cards and more. The $95 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 review.
The Platinum Card® from American Express
Our pick 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. The same rate applies to hotels booked on amextravel.com. Starting January 1, 2021, earn 5X points on up to $500,000 on flights per calendar year. 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. Every four years, cardholders get a $100 Global Entry or $85 TSA PreCheck® credit. Read the full review.
Capital One SavorOne Cash Rewards Credit Card
Our pick 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 review.
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 categories, 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.
Our April 2019 poll of favorite credit card features confirmed that Americans love their credit card rewards. The poll found that 3% cash back – something that might have once been considered extremely unlikely – was at the top of the credit card wish list for 40% of consumers. Sign-up bonuses, a common feature of rewards cards, were also in the top 5. In another recent survey, the majority of consumers said rewards were the best benefit offered by their favorite credit card.
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.
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.
Which is better: cash back or travel points?
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.
What credit score is needed to get a rewards credit card?
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, as well as 1% cash back on all other purchases.
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 in the form of statement credits, checks or bank account deposits. 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, and with the right card, the rewards won’t expire for the life of the account – so the rewards 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 on Amazon.com, Walmart.com and Target.com purchases from October through December 2020 on up to $1,500 in purchases quarterly after activating (then 1%), right on time for holiday gift purchases. Quarterly sign-up required.
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.
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.
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.
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.
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.
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?
The answer depends on how much you’re going to spend on the card, especially within the bonus categories. For cash back cards, it can be as simple as doing a quick calculation. 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.
How to use a rewards credit card
How to earn credit card rewards
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.
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 MCC’s 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.
How to redeem rewards
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.
How to maximize credit card rewards
To take full advantage of your points, you need to look at the rewards card from all angles, including how much you’ll spend and what you’ll buy. Here’s a quick guide on how to maximize your points:
Calculate: Calculate how much you’ll spend, making sure you will at least recoup the annual fee.
Take advantage of the sign-up bonus: Make sure that you will be able to spend the required amount within the required time for the sign-up bonus, but avoid the temptation of making extra purchases just for the sake of reaching the required spend. Stick to sign-up bonuses that you know are attainable from your regular or pre-planned purchases.
Make it your go-to card: See if you can pay your rent, insurance and utilities with it, but make sure there are no convenience fees. Buy your groceries with it, and pull it out at restaurants.
Pay in full and pay on time: If you can’t pay it off in full each month, there’s no point in acquiring it. The interest fees will overshadow any cash back or points you’ve earned. Never go over the limit or pay late; these are wasted dollars.
Use shopping portals: Frequently check for deals. Just make sure you are fully rewarded for using points or miles. Some cards don’t reward you for the full amount with their shopping portals or gift cards.
Take full advantage of the benefits: Make full use of the benefits, such as price protection and auto rental insurance.
Consider multiple cards: Having multiple credit cards can be a great way to maximize your hard-earned rewards, especially if you have a hotel or an airline card. Since cards such as these two are used primarily for booking rooms or flights, it may be useful to have a cash back card or a luxury rewards card as well to bolster your earnings. For example, partnering the Wells Fargo Propel American Express® card with the Chase Sapphire Preferred® card could boost your earnings through expanding your rewards categories.
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.
There’s Chase Ultimate Rewards, with generous rewards for your loyalty. And what about American Express Membership Rewards? Then, there are popular hotel rewards plans.
Here are some popular rewards programs and how they work.
Rewards program
Highlights
Our review
American Express Membership Rewards
Transfer points to 22 airline and hotel partners
Accumulate rewards from multiple American Express cards in one account
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.
If you’re a big spender, you’ll want to take advantage of a card with unlimited cash back or points. Choosing a card with a hefty sign-up bonus is another way to boost your total rewards earnings. Here, we compare some of the best sign up bonuses and unlimited rewards offers with the average offers for the 20 most popular rewards cards.
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
5% cash back on gas (on up to the first $6,000 in purchases per year, then 1%) and 3% cash back on dining
Maximum of $5,000 in cash back earnings per year
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
CreditCards.com writer Mariah Ackary is passionate about financial literacy for all, especially women. Mariah's work has been cited in such media as Forbes, Fox Business and CNBC. An expert in rewards and small businesses, she does the research to make complicated financial topics more approachable for her readers. Send your questions to mackary@creditcards.com.
About the Editor
Laura Mohammad
CreditCards.com Senior Editor Laura Mohammad writes, edits and coaches extensively on all things credit cards and works to bring you the most up-to-date analysis and advice. In Laura's 20+ years as a financial and personal finance journalist, her work has appeared in such publications and websites as The New York Times, The Associated Press, StreetAuthority.com and American City Business Journals. You can reach Laura at laura.mohammad@creditcards.com.
Essential news and expert tips in your inbox every week
Your credit cards journey is officially underway.
Keep an eye on your inbox—we’ll be sending over your first message soon.
Advertiser Disclosure
CreditCards.com is an independent, advertising-supported comparison service. The offers that appear on this site are from companies from which CreditCards.com receives compensation. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within listing categories. Other factors, such as our own proprietary website rules and the likelihood of applicants' credit approval also impact how and where products appear on this site. CreditCards.com does not include the entire universe of available financial or credit offers. CCDC has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.
Know your odds before you apply
See your unique approval odds listed next to cards on our site. We’ll do a soft credit pull to find them, which will never impact your credit score.
Calculating your approval odds
Oops! Something went wrong.
We’re sorry, but something went wrong and we couldn’t find your approval odds. Instead, you’ll see recommended credit ranges from the issuers listed next to cards on our site to help you determine which cards you’re likely to be approved for.