Disclaimer
This article reviews our picks of the best rewards credit cards. We may get compensation if you visit partner links on our site. We may not cover every available offer. Our relationship with advertisers may impact how an offer is presented on our website. However, our selection of products is made independently of our relationship with advertisers.
If you haven’t looked at rewards credit cards lately, you may be surprised by how much you can gain in cash back, points or miles without necessarily having to track complicated rules. Some cards provide sign-up bonuses worth over $1,000 for new cardholders who charge a certain amount in the first few months. And with rewards categories ranging from travel to groceries to rent payments, you can find an option that yields benefits tailored to your spending patterns.
For disciplined spenders, a rewards card can be a lucrative tool. We’ve rounded up our top picks among cards in 12 categories. For each card, we’ve included the annual fee, if it charges one, and the sign-up bonus if one is offered. Except where noted, rewards do not have expiration dates or caps, and the travel cards do not charge foreign transaction fees. Fees, rewards and other terms are subject to change, so before you apply for a card, check its current terms with the issuer.
You may notice that our list of the best cards differs from many other reviewers. That's because we crunch the numbers on a broader variety of cards, such as those issued by credit unions and smaller banks.
Quick List of the Best Cards
In a hurry? Jump to the best credit cards in each category.
BEST CASH BACK CREDIT CARDS
Check out our best cash back credit cards to see all of the winners in this category.
BEST TRAVEL CREDIT CARDS
- No Annual Fee
- Worth the Annual Fee
- Flexible Travel Redemptions
- Luxury Travel
- Airline Cards
- Hotel Cards
- Dining Cards
To see all of Kiplinger picks in the travel category, read our guide to the best travel rewards credit cards.
Expert Advice on Credit Cards
If you’re planning to do plenty of traveling this year, look for a card that offers points or miles you can redeem for a variety of travel purchases, says Matt Schulz, chief credit analyst at LendingTree and author of Ask Questions, Save Money, Make More: How to Take Control of Your Financial Life. “For so many people, a flexible, general-purpose travel card can be really useful.”
While frequent travelers can gain sizable benefits from the lucrative perks and bonuses that come with many travel cards, the humble cash back card that provides a flat payback on all spending is often the best fit for other spenders. “For most people, a no-annual-fee, 2% cash-back card is simple but hard to beat,” says Ted Rossman, a senior industry analyst at Bankrate. “Treat it like a 2% discount on everything you buy.”
Before you sign up for a rewards credit card, take a hard look at your spending habits. These cards make sense only if you pay your credit card balance in full and on time every month. If you carry a balance from month to month, you’ll usually pay interest, which will counteract the benefits of any rewards you earn.
Kiplinger's Review Methodology
For each card, we have calculated a typical annual reward based on spending patterns in the U.S. Bureau of Labor Statistics Consumer Expenditure Survey and assuming $34,000 spent on the card annually (unless otherwise noted). For cards that do not waive their annual fee the first year, we’ve subtracted the annual fee from the cash value of the annual reward. We have also considered factors such as ease and flexibility of earning and redeeming rewards and whether you must be a member of a club or financial institution to apply for a card. Except where noted, rewards do not have expiration dates or caps, and the travel-oriented cards do not charge foreign transaction fees.
Interest rates, fees, rewards and other terms listed in this article are subject to change. Before you apply for a credit card, check its current terms and conditions with the issuer.
Types of reward credit cards
A rewards credit card offers cash back, points or miles on your everyday spending. Some cards may also offer other features, such as an intro 0% APR promotion, insurance protections, travel perks and more. Here's a quick breakdown of the different types of credit card rewards you can earn.
Cash back credit cards typically offer straight cash back on your purchases, making it easy to know how much value you're getting with each purchase. These cards used to offer only one percent back for each dollar spent, but that reward level has ticked up to 1.5% to 2% recently. According to Ted Rossman of creditcards.com, “Two percent cash back is kind of like the gold standard for keeping it simple.”
Note, however, that although some credit cards are marketed as cash back cards, they may offer points that you can redeem for cash back and in other ways.
Points credit cards offer a fixed number of points for each dollar you spend, with some cards offering more points on certain purchases.
One example of a points program is Chase Ultimate Rewards, which allows you to use your rewards to get cash back, buy gift cards, book travel, shop online and more. Another example is a hotel loyalty program, which limits your redemptions to award stays and related options. Even some airlines use the term "points" for their currency.
Historically, miles have been primarily associated with frequent flyer programs, but some general travel rewards credit cards use the term "miles" for their currency.
General miles programs, such as Capital One’s, may allow you to redeem your rewards for a variety of travel purchases, including through their travel portal or on your own. With airline programs, however, your options are generally limited to award flights, upgrades and related redemptions.
How to earn credit card rewards
Many rewards credit cards offer welcome bonuses to new cardholders when you meet a minimum spending requirement. For example, you may earn $200 after you spend $500 in three months or 60,000 points when you spend $3,000 in three months.
You can also earn cash back, points or miles when you use your card to make purchases. There are three different ways a rewards program can be structured.
With this type of rewards card, you'll earn the same rewards rate — say, 1.5% back or two miles per dollar — on every purchase. If you want a simple approach to rewards, this option may be appealing.
A tiered rewards credit card offers different rewards rates on different spending categories. For instance, you may earn three points per dollar on travel and dining, two points per dollar on gas and one point per dollar on all other purchases.
These cards can be a great way to earn a lot of cash back, points or miles on some of your top budget categories.
Some cash back credit cards offer bonus rewards on spending categories that change every few months, allowing you to maximize rewards on a wide variety of purchases throughout the year.
For example, you may earn 5% cash back on up to $1,500 spent on groceries and department stores one quarter, then at Target and Amazon.com the next.
What are points or miles worth?
With cash back rewards, the value you're getting is straightforward. If you have a 2% rewards rate and spend $100, you'll earn $2 in rewards.
With points and miles, however, valuations vary depending on the program and even the card. General rewards programs, such as Chase Ultimate Rewards or American Express Membership Rewards, offer a specific value for each redemption option. For example, you may get one cent per point on travel redemptions but only 0.7 cents per point for online shopping. One way to estimate the value of your points or miles is to use the estimated values provided by Bankrate.
With airline and hotel rewards programs, the value of your points or miles depends on several variables, including the travel dates, destination, fare class, hotel category and more.
Who should consider a rewards card?
A rewards credit card could be a good fit for you if you meet the following criteria:
- You pay your bill in full each month: Paying your credit card bill in full each month will help you avoid interest charges on your purchases. If you carry a balance, the interest you pay can neutralize some or all of the value you get from your card's rewards.
- You have decent credit: The best rewards credit cards require good or excellent credit, typically a FICO credit score of 670 or higher. Some rewards cards are accessible to people with fair or even poor credit, but research and compare several options to limit fees and other less favorable features. If you don’t know your score, here are some ways to see free credit scores from FICO.
- You like to use your credit card for everything: The more you use your rewards credit card, the more you'll earn. If you prefer to use cash or a debit card, a rewards card might not add enough value to be worth it.
On the other hand, it might make sense to avoid rewards credit cards if:
- You struggle with overspending: The prospect of a welcome bonus or rewards on your purchase can make it more tempting to spend more than you can afford to pay back each month.
- You prefer to maximize other benefits: Some credit cards specialize in other features, such as an extra-long 0% APR promotion on purchases or balance transfers, and don't offer rewards. But depending on your situation, the benefit of interest savings might be more valuable to you than a rewards program. Additionally, if you're looking to build or rebuild your credit, that objective may be more important than earning cash back, points or miles.
Can you get a rewards card with bad credit?
Yes, it's possible to get a rewards credit card with bad credit. However, there may be some caveats to consider. For example, a card may require a security deposit equal to your desired credit limit, which you may not get back until you close the account.
Some bad-credit rewards credit cards may also charge an annual fee or a high interest rate, which can impact the value you get from the rewards program.
If you use a good rewards credit card for bad credit, you can enjoy the benefits of rewards while building a positive credit profile. However, prioritizing your credit-building efforts will make it easier for you to get the rewards card you want in the future.
How to pick a rewards credit card
There are a few different factors to consider to determine which rewards credit card is the right fit for you.
Credit score
Again, if you want good approval odds for the best rewards credit cards, you'll want good or excellent credit. Check your credit score before you apply for a card to gauge your approval odds. You may also consider getting pre-approved, if possible.
American Express, for instance, tells applicants whether or not they're approved with no hard credit inquiry. You'll undergo a hard credit check only if you accept the card.
Spending habits
Review your budget to see whether it makes sense to get a rewards credit card that offers bonus cash back, points or miles on some of your biggest monthly expenses. If you spend a lot on gas and groceries, for instance, prioritize cards that offer bonus rewards on those categories.
Also, if you're looking for a credit card with a welcome bonus, make sure you can meet the spending requirement to earn the bonus without overspending.
Feature preferences
Review the different features credit cards come with to determine what's most important to you. For example, do you need a 0% APR promotion for a large purchase or a balance transfer? Or do you prefer a travel credit card with a lot of perks and trip protections?
If you're looking at travel credit cards, consider how flexible you want your rewards to be. For example, if a card has transferable points or miles, make sure the partner airline or hotel programs include those you are likely to use or where already have an account. Also, consider whether you want to pay an annual fee or what it would take in terms of card benefits for you to agree to an annual fee.
Take your time to shop around and compare several credit cards to ensure you find the right one for you.
Maximizing rewards
You may earn additional rewards or welcome bonuses by applying for cards offered by the same company where you bank. For example, Bank of America offers an extra 25 to 75 percent back on cash back rewards for its Preferred Rewards customers.
Some credit card companies allow more than one adult family member to earn welcome bonuses. If you sign up for a new card that offers a $500 welcome bonus, for example, your spouse may also be able to earn the same bonus. Make sure you read card terms carefully to understand any limitations to bonus offers.
Disclaimer
As an independent publication dedicated to helping you make the most of your money, the article above is our view of the best deals and is not the opinion of any entity mentioned such as a card issuer, hotel, airline etc. Similarly, the content has not been reviewed or endorsed by any of those entities.
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