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An introduction to rewards credit cards — and how to choose the perfect one.

For many people, rewards credit cards are considered the best out there. You can get paid back a small amount for purchases you’d normally make and might also receive enticing benefits.

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Compare rewards credit cards

Updated January 24th, 2019
Name Product Welcome Offer Reward Value per Dollar APR (Annual Percentage Rate) for Purchases Annual Fee
Chase Sapphire Preferred® Card
Chase Sapphire Preferred® Card
Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
1x points
18.24% to 25.24% variable
$0 annual fee for the first year ($95 thereafter)
Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months.
Apply now
View details
Chase Sapphire Reserve®
Chase Sapphire Reserve®
Earn 50,000 bonus points after spending $4,000 on purchases in the first 3 months from account opening - that's $750 toward travel when you redeem through Chase Ultimate Rewards®.
1x points
19.24% to 26.24% variable
$450
Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months.
Apply now
View details
Chase Freedom®
Chase Freedom®
Earn $150 cash back after spending $500 on purchases in the first 3 months from account opening
1% cash back
17.24% to 25.99% variable
$0
0% intro APR for 15 months from account opening on purchases and balance transfers.
Apply now
View details
Chase Freedom Unlimited®
Chase Freedom Unlimited®
Earn $150 cash back after spending $500 on purchases in the first 3 months from account opening
1.5% cash back
17.24% to 25.99% variable
$0
0% intro APR for 15 months from account opening on purchases and balance transfers.
Apply now
View details
Blue Cash Everyday® Card from American Express
Blue Cash Everyday® Card from American Express
$150 statement credit after you spend $1,000 in purchases on your new card within the first 3 months.
1% cash back
15.24% to 26.24% variable
$0
Earn a $150 bonus statement credit after you spend $1,000 on purchases in the first 3 months. Rates & Fees
Apply now
View details

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Best rewards credit cards

Ultimately, the “best” credit card comes down to your specific needs. However, there are many options that are well above the rest. Here are a few excellent cards to help you start your search.

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Best for flat-rate cash back: Citi® Double Cash Card

Citi® Double Cash Card

  • Earn cash back when you make purchases
  • Earn additional cash back when you pay off your card
  • Intro APR on balance transfers
  • No annual fee
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Promoted

If you consistently pay your balance in full, you’ll find solid rewards with the Citi® Double Cash Card. When you pay off your purchases, you’ll earn a better cashback rate than you’ll find with other no-annual-fee, flat-rate cashback cards.

Best for everyday purchases: Blue Cash Preferred® Card from American Express

Blue Cash Preferred® Card from American Express

  • $200 statement credit after you spend $1,000 in purchases on your new card within the first 3 months.
  • 6% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%) - that means spending $60 a week at U.S. supermarkets could earn over $180 back per year.
  • 3% cash back at U.S. gas stations. 1% cash back on other purchases.
  • Over 1.5 million more places in the U.S. started accepting American Express® Cards in 2017.
  • Cash back is received in the form of Reward Dollars that can be easily redeemed for statement credits, gift cards, and merchandise.
  • $95 annual fee.
  • Terms apply.
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Promoted

If you spend a lot on everyday purchases, the Blue Cash Preferred® Card from American Express could be the right pick. You’ll pay an annual fee, but you’ll find stellar rewards on groceries and a strong rewards rate on gas.

Best hotel credit card: Starwood Preferred Guest® American Express Luxury Card

Starwood Preferred Guest® American Express Luxury Card

  • Generous welcome offer
  • Earn points on travel purchases
  • Annual SPG and Marriott Rewards statement credit and Free Night Award
  • Global Entry or TSA PreCheck credit
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Few hotel cards charge as high an annual fee as the Starwood Preferred Guest® American Express Luxury Card. Then again, few offer as many high-value perks. Not only will you earn excellent points on Starwood Preferred Guest (SPG)/Marriott Rewards purchases, but you’ll also enjoy benefits that can offset a large portion of the card’s annual fee.

Best for premium travel: The Platinum Card® from American Express

The Platinum Card® from American Express

  • Earn 60,000 Membership Rewards® points after you use your new card to make $5,000 in purchases in your first 3 months.
  • Enjoy Uber VIP status and free rides in the U.S. up to $15 each month, plus a bonus $20 in December. That can be up to $200 in annual Uber savings.
  • 5x Membership Rewards® points on flights booked directly with airlines or with American Express Travel.
  • 5x Membership Rewards points on prepaid hotels booked on amextravel.com.
  • Enjoy access to the Global Lounge Collection, the only credit card airport lounge access program that includes proprietary lounge locations around the world.
  • Receive complimentary benefits with an average total value of $550 with Fine Hotels & Resorts. Learn more.
  • $200 airline fee credit, up to $200 per calendar year in baggage fees and more at one qualifying airline.
  • Get up to $100 in statement credits annually for purchases at Saks Fifth Avenue on your Platinum Card®. Enrollment required.
  • $550 annual fee.
  • Terms apply.
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Promoted
The Platinum Card® from American Express is more expensive than most premium travel cards. However, it offers many benefits for the cost — including excellent travel rewards, fee credits, hotel benefits and airport lounge access.

Best for travel rewards with no annual fee: PenFed Pathfinder Rewards American Express® Card

PenFed Pathfinder Rewards American Express® Card

  • 0% APR promo balance transfer rate for 12 months with 3% balance transfer fee now through March 31, 2019. After that, the APR for the unpaid balance and any new balance transfers will be 12.74% to 17.99% variable
  • Earn 25,000 bonus points by spending $2,500 in the first 90 days of account opening
  • Earn 4x Points on travel purchases through the PenFed Honors Advantage program.
  • Earn 3x points on travel purchases for all other card holders.
  • Earn 1.5x points on all other purchases unrelated to travel.
  • $100 annual air travel credit
  • $100 Global Entry or $85 TSA PreCheck benefit every 5 years
  • No caps or limits on rewards
  • No annual or foreign transaction fees
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This card offers tremendous value for no annual fee: a strong signup bonus, top-notch rewards, an intro APR and travel credits.

Best for dining: Uber Visa Card

The Uber Visa Card ties the Savor® Rewards from Capital One® for best dining rewards. It pulls ahead with no annual fee, while its competitor charges a $95 annual fee starting the second year.

Both cards offer strong elevated rewards for different categories. It’s worth comparing them closely before picking one.

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What is a rewards credit card?

With a rewards credit card, you get a percentage back of what you spend. You’ll receive your rewards in the form of cash back, points or miles, which you can typically redeem through your card provider’s rewards portal.

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.

Types of rewards credit cards

Here are a few types of rewards credit cards that you might encounter. Remember that while a card may offer stronger elevated rewards for one category, it can also offer lesser elevated rewards for other categories.

What are elevated rewards?

    Elevated rewards are cash back, points or miles that you earn at a higher rate than the base rate. Accelerated rewards is another name for elevated rewards.

For example, a card might offer 1% cash back on all purchases as its base rewards rate. But it might offer 3% cash back for gas. This means the card offers elevated rewards for gas.

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Retail

Retail cards offer benefits and rewards tied to a particular retailer. You might only be able to use your card with the affiliated company.

Here’s an example: With the Forever 21 Credit Card, you’ll earn points for your spending, which you can redeem for rewards certificates at Forever 21. You’ll also receive perks like discounts and exclusive promotions. The card is valid only at Forever 21.

Cashback

You’ll receive your rewards in the form of cash back, which you can usually redeem for statement credit or a deposit into your bank account. Some providers let you redeem for travel, gift cards and merchandise.

Here’s an example: The Chase Freedom Unlimited® credit card offers 1.5% cash back on every purchase. You can redeem points for statement credit and bank deposits. Gift cards, travel and experiences are also available through Chase Ultimate Rewards.

Category-specific — Gas, grocery, dining, etc.

You’ll receive elevated rewards when you use your card for a certain category. For example, you might receive 3% cash back for one category instead of 1%, which is the normal rewards rate for purchases. Some cards have spending caps for the highest rewards rates.

Here are examples of credit cards for certain categories:

Airline

You’ll typically earn bonus miles when you spend on flights with a cobranded airline. Later, you can redeem miles for rewards like flights and car rentals through the airline’s rewards portal.

This card type often includes airline-specific perks like priority boarding and free checked baggage.

Here’s an example: United℠ Explorer Card

Hotel

A hotel credit card offers bonus points when you spend with a certain hotel chain. You can often redeem points through the chain’s rewards portal for hotel stays, travel packages, point transfers and more.

Usually, this card type also includes hotel-specific perks like loyalty-program upgrades and resort credits.

Here’s an example: Starwood Preferred Guest® Credit Card from American Express. Earn 6x points on eligible purchases at participating Starwood Preferred Guest and Marriott Rewards properties. Earn 2x points on all other eligible purchases.

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Cash back vs. points vs. miles: What type of rewards card is best for me?

Find your ideal rewards credit card

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How to choose a rewards card

  1. Think about what kind of rewards you want.
    Do you want cash back, store points or travel rewards? Each has different redemption options as well as pros and cons.
  • Cash back is typically easy to understand and redeem. However, it may not be as valuable as travel rewards.
  • Store points can help you shop at a certain retailer. But you might find them restrictive, as they can only be redeemed with your card’s affiliated company.
  • Travel rewards can be very valuable, depending on what you redeem them for. But they can take time to understand, and you want to be careful not to redeem them for less than the industry average.
  • Decide if you want to pay an annual fee.
    This simple step can quickly help you narrow down your options. Many cards offer decent rewards for no annual fee. If you want the most powerful rewards rates, you’ll usually need to pay an annual fee. Annual-fee cards often come with additional perks such as fee credits and access to airport lounges.
  • See where you spend the most money.
    To get the biggest bang for your buck, look for a card that offers elevated rewards for the categories you spend the most in. For example, if most of your budget goes toward groceries, it might not make sense to get an airline card — consider a grocery card instead. And if you’re always eating out, you might like a dining card.

What else should I consider when picking a rewards card?

Signup bonus

Cards that offer bonus points to new customers can help you kickstart your rewards points. You’ll likely need to meet some eligibility requirements before you can claim the points. For example, you may need to spend a certain amount on your card in the first few months.

Restrictions

Many rewards cards limit how you can earn and redeem points. If a card has a cap on elevated rewards for certain categories, you may want to look elsewhere if you’re a big spender. Keep an eye out for expiration dates on your rewards, too.

Interest

Interest rates vary from card to card. Comparing these, along with your spending habits, will help you calculate how much you’ll have to repay over time.

Introductory APRs

Some rewards cards offer introductory interest rates — often 0% APR — on purchases, balance transfers or both. If you want to make a balance transfer, consider paying off your debt entirely before making new purchases with your card.

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How to maximize your credit card rewards

Were you approved for a rewards card? That’s great news. Now follow these steps to squeeze as many rewards from it as possible.

    1. Grab the signup bonus.

      Your card probably has a signup bonus. This typically comes in the form of significant rewards if you reach a spending threshold within a certain time.

      Check your card’s signup-bonus requirements and calculate how much you need to spend per month to meet them. You don’t have to strain your budget just to get the bonus. However, there are many hacks that can help you reach the spending threshold.

    2. Spend more in your elevated-rewards categories.

      Your card might offer elevated rewards for certain purchase categories. If that’s the case, use it for those purchases as much as you can.

      For example, if your card pays 6% cash back on groceries, it’s a no-brainer to use your card at the grocery store as much as you can. Meanwhile, the card might offer just 1% cash back on all other purchases. For those purchases, you might want to use a card that offers a solid rewards rate — for example, 1.5% cash back — on everything you buy.

    3. Redeem your rewards for high-value options.

      With a cashback card, your rewards rate easily translates to your redemption value. For example, if your card pays 1.5% cash back and you spend $1,000 a month, you know you’ll earn $1,000 x 1.5% = $15 in rewards monthly.

      Point- or mile-based cards can be a little trickier. Some cards make it easy with automatic rewards redemption — usually for statement credit. Other cards have many redemption options, and give you different values for your rewards.

      The credit card industry generally values a point or mile at 1 cent each. If you have 10,000 points, then, they’re usually worth around $100. Try to get value from your rewards at or above this rate.

How to calculate redemption value

See how much your points or miles are worth for certain redemption options by following these steps:

      1. Check the monetary value of the redemption option. For example, you might be looking at a $25 gift card.
      2. See how many points or miles you must trade. Let’s say you need to redeem 3,000 points to get the gift card.
      3. Divide the redemption’s monetary value by the number of points or miles you must redeem. With some quick math, you’d see that $25 / 3,000 = 0.008. That means your points would be worth 0.8 cents apiece if you redeemed them for this gift card. That’s less than the industry standard of 1 point = 1 cent, so it’s a mediocre deal.
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Pros and cons of using a rewards credit card

Pros

  • Rewards. You can choose a card that fits your lifestyle and earn rewards on purchases you would have made anyway.
  • Redeeming rewards. Redemption options vary from card to card. You may be able to earn cash back, travel benefits, merchandise, gift cards and more.
  • Global acceptance. Most rewards cards are affiliated with Visa or Mastercard, and you can use these cards in over 200 countries and territories worldwide. While American Express and Discover credit cards aren’t as widely accepted internationally, they can be used in many locations around the world.
  • Extra perks. Many rewards cards offer extra perks, such as complimentary travel and rental car insurance. Compare your options to see which features work best with your lifestyle and spending habits.

Cons

  • Cost. You may have to pay an ongoing annual fee, or your card may have a higher APR than your basic, no-frills product.
  • Limitations. Your card provider might not let you earn more than a certain number of points in a calendar year, and your points may expire after a set time.
  • Temptation to spend. Rewards are always enticing. But if you aren’t careful, you could find yourself in snowballing debt. If you consistently carry a balance on your card, the interest could offset any rewards you earn.

Are rewards credit cards really worth it?

If you use your rewards card wisely, it could pay off handsomely. Here are the rewards you might earn based on the following sample budget. We’ll use the Bank of America® Cash Rewards credit card for our example.

CategoryYearly spendingRewards rateTotal cash back
Gas$3,6003%$108
Groceries$6,0002%$120
Other purchases$8,0001%$80

With no annual fee, the card offers valuable rewards. Over a year, you’d earn cash back worth $308.

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Who should use a rewards card?

Who are rewards cards best suited to?

  • Frequent spenders. If you plan on using your credit card frequently, you can benefit with strong rewards.
  • Loyal customers. If you do most of your shopping through a particular store, a retail card can reward you especially well versus another rewards card.
  • Cardholders who make regular payments. Making timely payments is crucial if you wish to make the most of your rewards credit card. If you keep a balance on your card, you’ll accrue interest that will eat into your rewards.

Who are rewards cards not suited to?

  • People in debt. If you’re in debt, consider a balance transfer card rather than a rewards card. It may be wise to avoid the temptation of earning rewards through additional spending.
  • Irregular spenders. If you don’t use your credit card regularly, it may not be worth paying the fees for a rewards card. This product type is only beneficial if the monetary value of your rewards exceeds the costs of the card.

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 not sure you want a rewards card yet, consider other options like 0% APR cards.

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