If you're using a plain old credit card every day that doesn't offer rewards, you're missing out. There are tons of credit cards with good rewards out there that pay you back for your daily spending. We're talking things like travel perks, cash, merchandise, and more.
We've sifted through some of the best rewards credit cards out there so you don't have to. Below, you'll find a list of the best credit card rewards programs. All you have to do is figure out what kind of rewards you can benefit the most from.
Top Credit Card With The Best Perks
Fidelity® Rewards Visa Signature® Gives the Highest Cash Back Rate
Fidelity® Rewards Visa Signature® focuses on providing you cash back for all your purchases. With this card, you earn 2% cash back on everything that you buy. No other credit card promises this high of a cash back rate. And, unlike many top-tier rewards credit cards, this card has no annual fee.
With the Fidelity Rewards card, all earnings are deposited into your Fidelity brokerage account. That could be an IRA, a 529 savings plan, or a Fidelity Cash Management account. This is a great perk because investments can help your rewards grow even larger over time.
Don't have a Fidelity brokerage account? Check one out! The Fidelity Cash Management account is a free checking account that gives you flexibility for the cash back you earn from your Fidelity card.
Redeem Cash Back to Spend as You Wish
Depending on the credit card, cash rewards can be redeemed in different ways. Some cards allow you to deposit the earnings into a bank account or to use the rewards as a statement credit. (Redeeming rewards as a statement credit can help you reduce your credit card balance).
Credit cards issued by brokerage firms make it easy to transfer rewards directly into an investment account. Why would you want to do that? Well, if your account is an IRA, you can use your rewards to grow your retirement savings even faster. That's just one example of how putting rewards into a brokerage account can help you grow your money.
Many brokerage firms also provide checking accounts. In that case, you can deposit your rewards into an account that gives you more flexibility.
Best Credit Card for Reward Points At Airlines and Hotels
Capital One Venture Rewards Lets You Pick Your Travel Rewards
The Capital One® Venture® Rewards card is a travel rewards credit card that offers unlimited 2 miles per dollar spent on everything. You can redeem these miles for statement credits for travel purchases you've already made. The redemption value is 1 mile per penny. (For example, 10,000 miles would be equivalent to a $100 travel credit).
The best way to use these rewards is to research the cheapest travel accommodations on your own. Then you can “erase” those travel purchases with your accumulated miles.
This card has an annual fee of $59 that's waived for the first year. If you spend $3,000 in the first three months of having the card, you'll get a sign-up bonus of 40,000 miles. What does that mean for you? An extra $400 for travel.
Travel Rewards Are Often Tracked with "Miles"
Miles are usually used as the rewards currency for travel-related rewards. Think airfare, hotels, ground transportation, and more. However, the miles currency does not correlate with the distance of the travel-related rewards. "Miles" is just a term used by credit card companies. What’s important is to understand the value behind each mile.
Airline credit cards often track miles as well. However, these miles are stored in the airline’s own frequent flyer programs. General travel rewards credit cards may also use miles to track rewards.
Interest Rates Are Higher On Rewards Cards
Rewards credit cards tend to come at a higher interest rate than other credit cards. Most cards carry APRs that range from 13%-25%. The exact interest rate will vary based on your credit score.
(The higher your credit score is, the lower your APR would normally be on any loan or line of credit. That includes credit cards with good rewards.)
Due to the higher APRs on rewards cards, they're not a good idea if you struggle to pay your balance in full each month.
If you carry a balance, the interest charges are very likely to exceed the value of the rewards earned. If this is the case, you would save more money by applying for a low-interest credit card instead.
Good Credit Required for Rewards Credit Cards
Rewards credit cards usually require a good credit score for approval. You have solid chance of qualifying for most rewards credit cards if you have a FICO credit score of 700-850. (The whole range of FICO scores is 300-850.) FICO scores are the most-used metrics for determining creditworthiness by lenders. To help you stay on top of your score, many credit card companies now offer free FICO scores to cardmembers.
Top Rated Credit Card With Multiple Rewards
Chase Sapphire Preferred® Card Provides Many Rewards Options
The Chase Sapphire Preferred® credit card is popular because of its flexible rewards program. You earn 2 points per dollar spent on travel and dining and 1 point per dollar on all other purchases. If you redeem your points through Chase’s online travel booking portal, your redemption will come at a 20% discount.
Another perk of the Chase Sapphire card is that you can transfer the points to major frequent traveler programs. (This includes British Airways, Southwest Airlines, United, Hyatt, Marriott and more.) This transfer is done at a 1:1 ratio. You can also redeem your points for cash back, gift cards, merchandise, and experiences.
This card has a $95 annual fee that's waived for the first year. There is also a card sign-up bonus of 50,000 points if you spend $4,000 in the first three months.
How to Earn the Most Rewards Based on Your Spending
Most rewards programs have a base rewards rate that applies to all purchases. However, the real benefit can be seen with the bonus rates that apply to specific types of purchases. For instance, many credit cards offer rewards on travel purchases or grocery shopping. To earn the most rewards, focus your spending towards those bonus categories.
Before signing up for a credit card, review your spending to be sure that it is the best rewards credit card for you. That way you can truly maximize your rewards. One way to do this is to review your past 6-12 months of credit card statements. This should give you a clear view on your spending habits. Then you'll know how to match for the best rewards credit card for you.
Getting the Most Value Out of Your Rewards Points
Furthermore, look at the rewards that you’d like to redeem the most. Some programs may value your points differently based on the reward. For example, the same 5,000 points you earn could get you a $50 gift card but only $25 cash back. Don't inadvertently get stuck with rewards that you don’t really want or need. Check how the redemption can change for each reward to prevent this.
Unlike the bonuses that you receive from opening a bank account, the rewards that you earn from credit card spending are not subject to taxes and do not need to be reported on your tax return. As stated by IRS Publication 550 (Investment Income and Expenses), “...if you receive noncash gifts or services for making deposits or for opening an account in a savings institution, you may have to report the value as interest.” This rule does not apply to credit card sign-up bonuses or rewards earnings.
Annual fees are not uncommon with credit cards that offer rewards. But if you can take advantage of those rewards, you should be able to more than make up for the fee.
Best Rewards Credit Card Offer For Cash Back Bonus
Chase Freedom® Offers Up to 5% Cash Back
Chase Freedom® is a cash back rewards credit card that offers 5% cash back on dynamic categories. (These categories change every quarter.) Many of these bonus categories are season-appropriate. All purchases that don't fall into these categories earn 1% cash back. Your rewards balance is then stored as points that can then be redeemed for gift cards, merchandise, and travel, or cash.
This card has no annual fee. There is also a $150 bonus if you spend $500 within the first three months of having the card.
A Trick to Earn More from Bonus Rewards Categories
For certain purchases to qualify for a bonus rewards rate, the merchant category code (MCC) must match the bonus rewards category. Therefore, rewards credit cards will issue bonus rewards based on where you make purchases, not on what you buy.
The good news? You can buy anything at a qualifying merchant and still earn the bonus rewards rate. So, if you’re earning a high bonus rewards rate at grocery stores, all purchases at the local supermarket will earn bonus rewards. They don't even have to be groceries, technically speaking.
Each merchant has its own MCC, which can vary based on the card network. (Card networks include American Express, Discover, MasterCard, or Visa). Furthermore, each location of the same merchant company could have a different MCC.
There are three ways to identify the merchant code of a location or website:
1) Check Visa’s supplier locator tool for a specific retailer by address 2) Make a small purchase and check your credit card activity to see the transaction category 3) Ask an associate at the store (preferably a cashier or manager)
Credit card companies tend to be very strict with their rewards policies, which you agree to when you sign up for a credit card. It's often very difficult to dispute a transaction's eligibility for bonus rewards.
Tips to Get More Rewards
The cards we listed here are a great foray into earning rewards as good as cash in your pocket. But sometimes, maximizing your rewards is up to how you go about it. Try some of these creative credit card hacks to earn even more points than you might have ever expected.
1. Use Gift Cards to Your Advantage
While different cards carry different purchase minimums before you can earn points, you can reach that minimum faster. How? By using your credit card to buy gift cards. Then just use the gift cards to buy what you need instead of using cash or credit. Purchasing gift cards with your rewards card will help you earn points faster than if you’d bought each item individually on your credit card. Just don’t spend more than you’ll be able to pay down!
2. Pay Off Your Bills
If you have a large purchase to make or a large bill to pay off, you can increase your rewards points by using your rewards credit card to do so. This can work even on travel expenses or by picking up the check after an evening out. (Though you may want to ask your friends to reimburse you for their share).Using a rewards card to pay for bills is a smart way to get some extra points. (Sometimes you can even do this with your rent.) Just make sure you can pay the balance off before the end of the billing cycle.
3. Sign up for Multiple Cards at Once
Our recommended cards above all carry minimum requirements before reaching a bonus. However, many cards offer bonus points just for signing up. One hack to help you aggregate points for yourself is to sign up for several such rewards cards at once, and then, cancel the cards once you’ve earned your points. We’d caution against making a habit of this, since opening and closing too many accounts - especially this quickly - may damage your credit score.
And, while one shouldn’t make a habit of opening and closing cards habitually, you should carry a variety of rewards cards and use them according to your needs and desired goal. For example, you may have one card that you use for purchases at gas stations and another you use for travel, since various rewards cards offer various bonus spending categories. For every purchase that doesn't fall into a bonus spending category, have a trusty all-in-one card on hand, like the Chase Sapphire card.
Best Credit Cards for Rewards
|Best Credit Cards for Rewards||Notable Features||Who It's Best For|
|Fidelity Rewards||Earn 2% cash back on all spending.||People who want to earn cash back and plans to use save it towards retirement.|
|Capital One Venture Rewards||Earn unlimited 2X miles per dollar on all purchases.||People who travel often and don't want to restrict their rewards to a particular airline or hotel.|
|Chase Sapphire Preferred||Earn bonus miles on travel and dining. Points can be transferred to partnered airline and hotel programs. Redeem rewards travel at a discount through Chase Ultimate Rewards.||People who want to earn travel rewards that can be transferred to multiple airline and hotel programs while getting different travel protections.|
|Chase Freedom®||Earn 5% cash back on categories that change every quarter.||People whose shopping patterns changed based on the season and prefer to earn high cash back on those purchases.|