How do rewards credit cards work?

With a rewards credit card, you get a percentage back of what you spend, typically in the form of cash back, points or miles. You can redeem this earned currency through your card provider's rewards portal. These points and miles represent a certain value in cash which can range depending on the rewards program. For cashback cards, rewards are usually expressed as a percentage. If a card offers 2% cash back on all purchases , for example, you'll receive $2 back for every $100 you spend. For other cards, rewards are usually expressed as a point or mile multiple. A card might offer 2x points on all purchases, for example, which means you'll receive 2 points for every dollar you spend.

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Rewards credit cards

Compare more than 200 rewards credit cards.

Kevin Joey Chen

Updated Jul 22, 2021. What changed?

Fact checked

Use our table to compare rewards credit cards and find the right option for your needs. To start, click "Show filters" to select your credit score, the features you want and the rewards type. You can also select specific card issuers to browse.

Name	Welcome offer	Rewards	Annual fee
Blue Cash Preferred® Card from American Express	Up to $350: 20% back on Amazon.com purchases in the first 6 months for up to $200 back, plus $150 statement credit after you spend $3,000 in the first 6 months	6% on select US streaming services, 3% on transit and US gas stations, 6% at US supermarkets on up to $6,000 annually, then 1% after that and on all other purchases (redeem as statement credit)	$0 intro annual fee for the first year ($95 thereafter)	Earn up to $350. In your first 6 months, you can earn a $150 statement credit when you spend $3,000, and earn 20% back on Amazon purchases made with your card, up to $200 total. Having 6 months to earn a welcome offer is a rare benefit as most cards give you only 3. Terms apply, see rates & fees	Apply now View details	Compare	loading Fetching your data...
Blue Cash Everyday® Card from American Express	Up to $250: 20% back on Amazon.com purchases in the first 6 months for up to $150 back, plus $100 statement credit after spending $2,000 within the first 6 months	3% at US supermarkets on up to $6,000 per year (then 1%), 2% at US gas stations and select US department stores and 1% on all other purchases (redeem as statement credit)	$0	Earn up to $250. You'll get 20% back on Amazon.com purchases in the first six months for up to $150 back, and $100 after you spend $2,000 in the first six months. This is a higher-than-average welcome offer for a card with no annual fee. Terms apply, see rates & fees	Apply now View details	Compare	loading Fetching your data...
Chase Sapphire Preferred® Card	100,000 points after spending $4,000 in the first 3 months. That's $1,250 when you redeem through Chase Ultimate Rewards®	5x points on Lyft, 2x points on travel and dining and 1x points on all other purchases	$95	Up to $1,250 signup bonus Earn a massive signup bonus of 100,000 points with this popular travel card. That's worth up to $1,250!	Apply now View details	Compare	loading Fetching your data...
Chase Freedom Unlimited®	$200 after spending $500 in the first 3 months, plus 5% cash back at grocery stores (not including Target® or Walmart®) on up to $12,000 in the first yeares) on up to $12,000 spent in the first year	5% cash back on travel purchased through Chase, 5% on Lyft, 3% on dining and drugstores and 1.5% on all other purchases	$0	This solid 1.5% cashback card gets even better with the addition of up to 5% back in categories like travel, drug stores and dining.	Apply now View details	Compare	loading Fetching your data...
TD Double Up℠ Credit Card	$75 cash back in the form of a statement credit when you spend $500 within the first 90 days after account opening	Up to 2% cash back. 1% cash back on purchases plus 1% when you redeem into an eligible TD Bank Deposit Account	$0	New Product Earn up to 2% cash back. 1% cash back on purchases plus 1% when you redeem into an eligible TD Bank Deposit Account. Available in: CT, DC, DE, FL, MA, MD, ME, NC, NH, NJ, NY, PA, RI, SC, VA, VT	Apply now View details	Compare	loading Fetching your data...

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The best rewards credit cards of 2021

Finder’s credit card experts selected 11 credit cards out of 200 based on the cards’ rewards program and additional perks.

See the winners

How to compare rewards credit cards

When shopping for a rewards credit card, consider the following:

Rewards. Consider where you spend most of your money and compare the cards with the highest rewards rate on those categories.
Interest rates. Rewards cards come with high interest rates, but these are rarely meant for carrying balance. The exception here is a card with a 0% intro APR period on purchases or balance transfers, which come with an interest-free period for carrying your balance during a promotional period of between 12 and 18 months.
Annual fee. Most everyday cards come with a $0 annual fee, which is great. But the cards with the highest rewards and the most valuable benefits charge an annual fee of between $99 and $550. Consider whether you can offset the annual fee with the card’s perks and rewards.
Additional perks. The more expensive the card, the higher the benefits. This means a travel card with a $550 annual fee offers way more than a card with a $0 annual fee. For example, the premium travel card comes with an airport lounge access, up to $300 statement credit, points transfer to partners, premium travel insurance and more.

Compare rewards cards by spending type

To maximize your rewards, get a rewards card that offers more points in the category you spend most.

Gas rewards

Grocery rewards

Travel rewards

Restaurant rewards

Entertainment rewards

Types of rewards credit cards

There’s a wide variety of rewards credit cards available on the market catering to a variety of financial needs. Here’s a breakdown of each of your major options and who should get them.

Cash back

Rewards earned with these cards are given as cash back. You can redeem this cash back as a statement credit or deposit into your bank account.

Get this type of rewards card if: you prefer a simple, fire and forget rewards structure.

Points

These cards earn points on certain purchases, such as restaurants, gas or streaming services.
You can then redeem these points in a variety of ways, such as travel, gift cards or cash back.

Get this type of rewards card if: you like flexibility in your rewards and enjoy getting even more value out of your rewards with a little research.

Travel

These cards earn points or miles on travel purchases, such as flights, cruises or hotel nights. These cards aren’t tied to a specific travel brand, letting you earn rewards regardless of how you travel.

Get this type of rewards card if: you travel frequently but don’t have a single airline or hotel you use more than others.

Airline

Earn bonus miles when you spend on flights and other eligible categories. You can redeem these miles on additional flights and other rewards. These cards often come with additional airline benefits associated with a specific airline such as Delta or American Airlines.

Get this type of rewards card if: you largely fly with a single airline, want to redeem your credit card rewards back into flights, and want additional perks for your flights and airport travel.

Hotel

Earn points when you spend on hotel stays and other eligible categories. Redeem these points on rewards nights and other hotel rewards. Like airline cards, hotel cards often come with additional hotel perks associated with a specific hotel chain.

Get this type of rewards card if: you have a preferred hotel chain you use, you plan on spending your credit card rewards on additional nights, and you want additional perks associated with that hotel chain.

Retail

These cards offer benefits and rewards tied to a particular retailer. Often, you can only use these cards with the affiliated company.

Get this type of rewards card if: you often shop at a particular retailer, want to redeem rewards back into that retailer, and you don’t need to use your credit card for other purposes.

Common credit card rewards programs

Most credit card providers offer a rewards program of some kind. To choose the best rewards program for your needs, consider whether you want a simple rewards structure like cash back or whether you want rewards redemption flexibility.

Rewards program	Highlights	Program guide
Amex Membership Rewards	Points worth 1 cent on average Pay eligible charges on your credit card statement with points Pay with points on Amazon, PayPal, Grubhub and more Redeem for gift cards Book hotel stays, flights, car rentals and cruises Shop with points Transfer points to 22 partner airlines and hotels, including Delta, British Airways, Hawaiian Airlines, JetBlue, Virgin Atlantic, Hilton and Marriott	Amex rewards program guide
Bank of America Rewards	You can earn cash with cashback cards and points with travel cards Points are worth 1 cent apiece for travel statement credit redemption Gift cards and cash back have a lower redemption value for points Cashback rewards can only be redeemed for cash with equal value Preferred Bank of America members can earn 25%, 50% or 75% more rewards on purchases	Bank of America rewards program guide
Capital One rewards	You can earn cash with cashback cards and miles with travel cards Travel miles are typically worth 1 cent apiece when redeemed for travel purchases Redeem miles for gift cards and cash with a lower redemption value Transfer miles to partner airlines, including JetBlue, Air Canada and Air Mexico	Capital One rewards program guide
Chase Ultimate Rewards	All Chase Freedom, Sapphire and Ink Business cards earn points Combine points between multiple cards Points worth 1 cent on average Book hotel stays, airfare, car rentals and cruises via the program Points are worth 25% more when redeemed at the portal with a Sapphire Preferred card Points are worth 50% more when redeemed at the portal with a Sapphire Reserve card Redeem for cash as a statement credit or gift cards Buy merchandise Shop with points on Amazon.com Transfer points to 12 partner airlines and hotels, including JetBlue, Southwest Airlines, United Airlines, Virgin Atlantic, IHG, World of Hyatt and Marriott	Chase Ultimate Rewards guide
Citi ThankYou Rewards	Points are worth 1 cent on average for travel purchases Redeem for cash as a statement credit or gift cards Shop with points on Amazon.com Pay with points to cover statement credit purchases Use points toward your student loan or mortgage Transfer points to partner airlines including JetBlue, Virgin Atlantic, Turkish Airlines and Aeromexico Donate points	Citi ThankYou rewards program guide
Discover rewards	Travel card earns miles Cashback card earns cash Miles are worth 1 cent apiece Redeem miles for a statement credit toward travel purchases or cash as a direct deposit You can’t transfer miles to airlines or hotels	Discover rewards guide

How to make the most of your rewards

With a good or excellent credit score getting a rewards credit card is easy. But to make the most of your rewards, and to stay out of debt, you’ll need to do some work.

How to earn points

Spending is the best way to earn points points. But some cards offer more points for certain categories, like gas, groceries, department stores, dining and travel. While other cards offer a flat reward for all purchases. Review your spending habits to find the right reards card for you.

How to maximize points

Maximizing your credit card rewards takes dedication.You need multiple credit cards that each earn accelerated rewards on a particular category. Then use each card where it earns the most. Some of the best credit card combinations are the Chase trifecta and the Amex trifecta.

Another way of maximizing points is by earning the signup bonus and redeeming your points with the highest redemption value. In some cases — as with the Chase credit cards — you can transfer your points from one card to another and get up to 50% higher redemption value.

How to redeem points for the best value

To get the highest points redemption value you need to use your points for the right reward. For example, travel credit cards often have a 1 cent value per point, but only if you redeem it toward travel purchases. This means, avoid gift cards, cash and merchandise and focus only on travel redemption.

Some credit cards let you transfer points to partner airlines and hotels. But this doesn’t necessarily mean that you’ll get better points value. To be sure you get the most for your points, compare the redemption value in points on your credit card and travel partners by dividing the cash price with the points price.

Example

A hotel stay costs $200 when paid with cash, 30,000 with credit card points and 40,000 points with partner hotel rewards program.

$200 divided by 30,000 points = 0.006
$200 divided by 40,000 points = 0.005

This means you get a 0.6 cents per point value with your credit card points and 0.5 cents per point value with the partner hotel. The higher the number, the higher the redemption value. In this case, it makes more sense to redeem your points with your credit card program than to transfer them to the partner hotel rewards program.

Ask the experts

Mark D. Groza
Associate Professor of Marketing
Northern Illinois University

What is the best way to use credit card rewards?
There are two schools of thought here. First, from a purely economic perspective, the ‘best way’ to use a credit card with rewards is to use them for something you need in a way that maximizes the value of the points. Let’s say your credit card company offers a 20% bonus if you redeem them for a gift card to a retailer that you frequent – ‘the best’ way to use the rewards then, is to use them on products/ services that you need, which have the highest bonus (i.e., points that have the highest dollar value).

A second perspective is, rewards are a bonus and should be used for something that you really want but may not necessarily need. For example, perhaps you always wanted to take an all-inclusive trip to the Caribbean but could never justify the expense. Amassing enough points to cover the trip is a great way to justify it. This may not maximize the economic value of the points but it does provide tremendous value to the credit card holder and for some people is likely the ‘best-way’ to use credit card rewards.

Lee Huffman
Budget Travel Blog
BaldThoughts.com

What’s one question everyone should ask before getting a rewards card?
Paying an annual fee on a travel card is worth it only if you can reasonably make back the fee through its benefits and rewards or if it provides desirable optionality for redemption. Statement credits, discounts at retailers, and other card benefits can get you back to par. But the most important consideration is whether the card affords you the option to redeem for rewards that you can use.

Before applying, count how many ways you can redeem your miles or points with the airline or the credit card issuer itself. And pay attention to the quantity and quality of travel partners that are a part of the redemption network.

Eliot Buchanan
Co-Founder and CEO
Plastiq.com

What are the most important features of a rewards card?
The feature itself is not as important as understanding how to earn and redeem those rewards to its fullest potential. Not only should the rewards match what you want to redeem for, but you should also be intimately familiar with the value and options provided within the rewards program. And if you understand how to arbitrage your rewards for maximum value, even better!

Audrey Guskey
Associate Professor of Marketing
Duquesne University

What is the best way to use credit card rewards?
My advice is to match the rewards to your interests. If you like to travel, take advantage of that. If you like going out to eat, then use your rewards for restaurants. The biggest tip is to align rewards with your interest! If you like to shop pick one that’s accepted where you want to shop. Trading points for gift cards is always a smart move.

The more you use your credit card, the more points you will get, but be careful you don’t spend too much and over budget. Always pay your balance in full each month, otherwise, even the rewards you earn may be eaten up by the interest payments. And don’t sit on those rewards. You may forget about them or the program may change and you could lose those points.

Yuliya Strizhakova
Associate Professor of Marketing
Rutgers University School of Business-Camden

For the average consumer, is it better to get cash back or points on a rewards card?
It depends on what this average consumer wants. Earning cash is frequently an immediate next statement
reward. It is an instant deduction in payments that gives a feeling of actually getting something back from the credit card. Earning points may be beneficial if someone is aiming at a higher-priced award (e.g., airline tickets) or is looking for a discount for an expensive item. However, the reward is frequently delayed and may require a longer commitment to spending to earn this reward.

Paolina C. Medina
Assistant Professor of Finance
Texas A&M University

Why might credit rewards make you spend more?
Rewards are a great benefit of credit cards when used properly. However, there are several ways in which our brain can trick us into overspending.

For example, whenever a reward is framed as part of a challenge (like many introductory credit card offers), our brain triggers a gaming mentality, by which we don´t want to miss out on a prize: we pay a disproportionate amount of attention to the prize, compared to the cost incurred to earn it…

But the main risk is that this overspending may trigger the habit of revolving instead of paying the bill in full every month, in which case interest cost can break the bank.

Vassilis Dalakas
Ph.D., Professor of Marketing & Chair, Department of Marketing
Cal State University San Marcos

How can consumers get the most value from their rewards credit cards?
It is tempting to sign up for multiple rewards credit cards given the rewards and the fact that many of them have very appealing sign-up offers. However, it is important to always keep in mind one’s own interests and behaviors in determining if signing up for and using a rewards credit card is worth it. For example, getting a Disney rewards credit card makes sense and will provide good value for someone who is a big fan of Disney and visits Disney parks frequently but would be of little value to someone who buys Disney products or visits Disney parks sporadically.

Matthew Fisher
MBA, Lecturer
San Francisco State University

What is the ideal number of rewards cards to own?
The ideal number of reward cards to hold will vary by individual… It is very likely that most consumers can handle 2 to 3 reward cards and recall when they are best to use, but beyond that number would be very taxing for most. If two or three cards offer quarterly rotating benefits, then it would be difficult for a consumer to evaluate which card to select in the moment of checking out at the grocer, gas station, department store, or restaurant. If the cards also carry annual benefit maximums, then the decision becomes even more challenging.

Bottom line

There’s no shortage of rewards credit cards to choose from. Think about what rewards you want and how you typically spend, then compare a few cards before settling on the winner.

If you’re having a hard time finding a rewards card you like, take a look at our editors’ top picks for rewards cards.

Business Insider, credit card benefits during COVID

Thank you for your feedback!

Kevin Joey Chen

Kevin Joey Chen is a credit cards, banking and investments writer whose work and analysis have appeared on CNN, U.S. News & World Report, Business.com, Lifehacker and CreditCards.com. He's passionate about helping you get your finances in order by expertly navigating cutting-edge financial tools — including credit cards, apps and budgeting software.

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Rewards credit cards