rewards credit cards comparison

Your 101 guide to rewards credit cards

Want to earn rewards points every time you pay with plastic? Compare rewards credit cards to find the right one for you.

Do you regularly make purchases with your credit card? A rewards card can be a worthwhile way to get something back from your spending. Whether you’re a frequent flyer, loyal customer or big grocery spender, you can find a rewards credit card to suit almost any lifestyle.

As these cards come with fees and restrictions, compare your options to determine which card offers more rewards and more bang for your buck.

Barclaycard Arrival Plus World Elite Mastercard

Our Pick: Barclaycard Arrival Plus World Elite MasterCard

Earn 50,000 bonus miles and enjoy the current 0% APR for 12 months

  • $0 annual fee for the first year ($89 thereafter) annual fee
  • 16.74% p.a. on purchases
  • 0% p.a. for 12 months with minimum of $5 or 3% balance transfer fee on balance transfers
  • Cash Advance Rate of 25.74% p.a.
  • Up to 23 days interest free

The perks and benefits of a rewards credit card

  • Earn rewards points. The major draw of this type of card is earning points that can be redeemed for rewards. Depending on the card you use and the promotions in place, you may be able to earn bonus points when making certain types of purchases or shopping with a particular retailer. Additional cards linked to the account can also earn rewards points as well.
  • Redeeming points. What you can redeem your points for will vary from card to card. Some allow you to redeem points for flight rewards as well as shopping or travel vouchers. Others can be used for cash back, to redeem merchandise or even to donate to charity.
  • Extra perks. Some rewards credit cards come with extra benefits beyond the rewards program. Some may offer low interest on purchases, while others provide extra warranty or complimentary rental car insurance coverage. Compare the features of the card to discover which will work best with your lifestyle.

Compare rewards credit cards

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What types of rewards credit cards are available?

  • Retail rewards. These cards offer benefits and rewards tied to a particular retailer. Some retail credit cards available in the U.S. include Ace Hardware, Athleta, Banana Republic, Best Buy, GAP, L.L. Bean, Macy’s, Old Navy, Target and Wal-Mart. Consider where you shop the most and see whether they offer a card to reward your loyalty.
  • Cash back rewards. Some credit cards let you redeem your accumulated reward points as cash back. You can use this cash back to pay credit card fees or to reduce your outstanding balance (depending on the card). The Chase Freedom card offers cash back, as does the Blue Cash Everyday Card from American Express.
  • Gas rewards. If you use your credit card to pay for gas, this type of card could reward you every time you fill up. These cards also sometimes offer bonus points, fuel vouchers and discounts as rewards. American Express, Chase and Barclays all provide gas rewards credit cards. Check our guide to learn more.
  • Airline rewards. Are you a regular jet-setter? Then an airline rewards credit card could be a wise choice. You can use these cards to earn airline rewards points for everyday purchases and can  redeem them for rewards such as airline tickets and flight upgrades. Most leading credit card providers in the U.S. offer credit cards linked to airline rewards. Learn more in our detailed guide to airline rewards.
  • Travel rewards. Cardholders can earn points for both travel-related and everyday purchases. Depending on the card, you can redeem your rewards for travel perks (such as flights, upgrades and accommodation) as well as other rewards (such as gift vouchers, gadgets and homewares). The Chase Sapphire Preferred Card is an example of such a card.
  • Hotel credit cards. If you use a particular hotel chain on every trip, you could rack up rewards for your loyalty. The points you earn for staying at the hotel can then be redeemed for discounts and vouchers. The Starwood Preferred Guest Credit Card from American Express, the Club Carlson Premier Rewards Visa Signature Card, and the Citi Hilton HHonors Visa Signature Card are all examples of such cards.
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How can I compare rewards credit cards?

  • Annual fee. While some rewards cards charge no ongoing annual fees, others charge higher annual fees. The more features the card has, the higher the fee is likely to be.
  • Rewards program. Choose a rewards program based on your lifestyle, and select the one that will offer the greater rewards value. If you’re a loyal customer to a particular retailer, you could benefit from their rewards card. A frequent globetrotter might get more from an airline rewards card. While you can sign up for multiple rewards cards, using a single card for all purchases is generally the fastest way to earn points.
  • Earn rate. This refers to how many rewards points you earn per dollar spent, and generally varies from one to three points per dollar. The earn rate lets you calculate the monetary value of your points and how much you’ll have to spend to redeem a particular reward.
  • Bonus points. Cards that offer bonus points to new customers can help you kickstart your rewards points. You may need to meet some eligibility requirements before you can claim the points (such as spending a certain amount in the first three months), so make sure to confirm these conditions before applying.
  • Limitations and restrictions. Most rewards cards limit the way you can earn and redeem points. You’ll often only be able to earn points with particular retailers or airlines. If the card comes with a points cap, you’ll only be able to earn up to a certain number of points. If you’re a big spender, this could reduce your points earning potential. Keep an eye out for expiration dates on your points, too.
  • Interest costs. Interest rates will vary from card to card. Comparing these in conjunction with your spending habits will help you calculate how much you’ll have to repay over time.
  • Balance transfer. Some rewards cards offer promotional balance transfers that allow you to repay an existing debt at a lower rate. As balance transfers are designed to help reduce your debt, using the same card for purchases to build up points isn’t advisable.
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Who are rewards cards best suited to?

  • Frequent spenders. If you plan to use your credit card frequently, you can benefit by earning reward points each time you make a purchase.
  • Loyal customers. If you do most of your shopping through a particular retailer, these cards can be a valuable reward for your loyalty.
  • Cardholders who make regular payments. Making timely payments is crucial if you wish to make the most of your rewards credit card. This is because the outstanding balance in your account attracts interest, and the longer you take to repay it, the more you end up paying in the form of interest. Some rewards cards also withhold rewards if you’re carrying a high balance.
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Who are rewards cards not suited to?

  • People in debt. If you’re already in debt, you should consider a balance transfer rather than a rewards card. The temptation of earning rewards on purchases can have negative consequences.
  • Irregular spenders. If you don’t use your credit card regularly, the fees that come with a rewards credit card may not be worthwhile. A rewards card is only beneficial if the monetary value of your rewards exceeds the costs of the card.
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What are the pros and cons of using a rewards credit card?

Pros

  • Rewards for spending. You can choose a card that fits your lifestyle and earn rewards on purchases you would have made anyway.
  • 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 credit cards aren’t as widely accepted internationally, they can still be used in many locations around the world.
  • Extra perks. Many rewards cards offer extra perks, such as complimentary rental car insurance. Compare your options to see which features work best with your lifestyle and spending habits.

Cons

  • Cost. Rewards credit cards aren’t free. For instance, you may have to pay an ongoing annual fee or the card will attract a higher APR than your basic no-frills card.
  • Limitations. Your card provider might not let you earn more than a given number of points in a calendar year, and your points can also expire after a set time frame.

A rewards credit card can be a useful way to earn extra benefits on everyday purchases. The variety of rewards credit cards available ensures that there is an option to suit almost every lifestyle. As there are so many cards on the market, and each comes with separate terms and conditions, you should compare your options to determine which one offers you the most value.

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Are rewards credit cards really worth it?

Out of the many rewards available, cash back usually offers the best value for customers. The amount of cash back you receive depends on what you purchase. You can get cash back rewards for groceries, gas station purchases, and more.

While travel rewards credit cards usually aren’t the most popular choice, regular travelers would get more benefit from one than from a cash back rewards card. Considering that most travel cards waive the fee for the first year and offer great sign-up bonuses, they can be very valuable to frequent flyers.

Another thing to consider is that just because a credit card offers ways to earn points quickly, they aren’t necessarily a better value. Even though they have high rewards rates, it could take that many more points to actually redeem a reward.

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Frequently asked questions

Yes, some credit cards let you transfer your accumulated rewards points to your frequent flyer program account. Check the terms and conditions or get in touch with your provider to confirm these details.

To get the card you’ll have to meet the card provider’s lending criteria. The APR your card attracts depends mainly on your credit history, so it might not be the same.

Yes, there is. The fine print should tell you if there’s a cap on the maximum number of points you can earn, as well as if they are subject to expiration. You may be able to benefit from higher earn rates on specific categories, details of which you can find in the fine print. You can also find out if there’s a tier system of earning points based on how much you spend annually.

Yes, some credit cards come with promotional APRs for purchases, and these can stay in place for different time periods. Again, compare your options to determine which one offers you the greatest benefit.

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