If you’re looking to maximize every dollar you spend, a rewards credit card can help.
As their name implies, these cards reward you with points, cash-back, or other promotions or discounts that make your money go further.
But as with any credit card or financial product, you need to do some research before deciding on a rewards card. Often, these cards have higher fees and interest rates, so you’ll have to be responsible with your spending and try not to carry a balance. You’ll also need good credit to qualify for a rewards card, particularly one that makes extra fees worth it.
Ultimately, you also want a rewards card that gives you something you can use. It’s pointless to pay for a card that gives you points at a hotel you won’t visit. Instead, take some time to consider different types of rewards, and read up on the best rewards credit cards available now.
Typical Credit Card Rewards
No two rewards cards are the same, so it’s always important to read the fine print and understand what it is you’ll get when you spend. There are three main types of rewards, and the benefit of each will depend on your lifestyle.
Cash Rewards: There are variations in how you get – and use – your cash, but these rewards systems are designed to help you save a little of the money you spend. Some lenders may issue a check or a credit to your bank account. Others may credit any amounts to your card account, meaning you’ll save the next time you spend.
Point Rewards: These rewards credit you points that you can then use to shop in a specific site linked to your card issuer’s reward program. If you earn a point for every dollar, this doesn’t mean you get a dollar to spend, but you’re instead accumulating points to get a significant discount on a product or experience offered by the program.
Miles and Travel Rewards: As you may imagine, these cards give you credits towards future flights or hotel stays. If you find it hard to plan for and schedule vacations, a rewards card can help motivate you to take a break. However, if you are an infrequent traveler, you may find that you get better savings with a different type of reward.
How To Find A Quality Rewards Card
Ultimately it will be up to you to figure out which type of reward will benefit you the most. When you’re looking for the best rewards card, read any applicable information and compare rates and fees from multiple cards.
Other factors to consider when looking for a rewards card are:
- How much will you get at sign-up? Typically these companies offer a hefty bonus at sign-up to get you a reward as quickly as possible.
- How much do you have to spend at sign-up? The caveat with some of these initial bonuses is that they require you to spend – and sometimes that amount is a lot. If you have a big-ticket purchase coming up, that can be a way to meet any spending requirements early on.
- What are rates and fees during the promotional period? Since these cards often cost more to carry, how long will you get a reprieve from high interest and extra charges?
- How can you maximize your spending? Some cards may offer triple points at restaurants, while others may give that many for pumping some gas. Make sure that the card’s biggest bonuses are in sync with your spending and lifestyle.
- How will you get your rewards? Will you need to redeem points with another vendor? Will you get cash in your bank account or as a credit on a cash back card? Know the process of getting your rewards before you sign up.
The 6 Best Rewards Credit Cards Of 2018
Ready to get started with a rewards card? For savings on everything from travel to groceries, consider one of these six best rewards cards available.
1. Chase Sapphire Preferred® Card
Best For: Travelers and restaurant-goers
Annual Fee: $95
Promotional Period: Fee waived for 1 year
Sign-up Bonus: 50,000 points if you spend $4,000 or more within the first three months
Biggest Perks: 2x points on travel and dining; easy conversion of points to an airline or hotel rewards program
2. Barclaycard Arrival Plus
Best For: Travelers
Annual Fee: $89
Promotional Period: Fee waived for 1 year
Sign-up Bonus: 40,000 miles if you spend $3,000 or more within 90 days
Biggest Perks: You’ll earn rewards at a rate of 2.1%, which stays as a statement credit that can be used against travel costs – including cab fares and car services, even in your city.
3. Chase Sapphire Reserve℠
Best For: Frequent travelers
Annual Fee: $450
Promotional Period: None
Sign-up Bonus: 50,000 points if you spend over $4,000 in three months
Biggest Perks: An additional $300 annual travel credit, 3x points for travel and dining
4. Capital One® Venture® Rewards Credit Card
Best For: Travelers who want a flexible way to spend their rewards.
Annual Fee: $95
Promotional Period: Fee waived for 1 year
Sign-up Bonus: 50,000 miles if you spend $3,000 or more within the first three months
Biggest Perks: Unlimited 2x miles for every dollar and every purchase.
5. Citi® Double Cash Credit Card
Best For: Anyone – you’ll receive cash back with every purchase.
Annual Fee: None
Promotional Period: None
Sign-up Bonus: None
Biggest Perks: Every purchase earns 1% cash back, and when you’ve paid off that purchase amount, you get an additional 1%.
6. Discover it® – Cashback Match™
Best For: Everyday purchases – especially when they are at a quarterly qualifying merchant.
Annual Fee: None
Promotional Period: 0% APR on purchases for 14 months
Sign-up Bonus: After your first year of the card, Discover will match your total cash back earnings.
Biggest Perks: You’ll receive a staggering 5% cash back on purchases, but qualifying merchants and purchase types will change every quarter. Regular purchases earn 1% cash back.
While rewards credit cards often do have higher fees and interest rates, the savings they provide can well outweigh these costs. When considering a new credit card of any type, it’s necessary to spend and pay off your balances responsibly. Stay up to date with more helpful finance tips and sign up for our newsletter now!
