Best Rewards Credit Cards

Welcome to our guide to the best rewards credit cards! If you’re looking for a credit card that can help you earn rewards for your purchases, you’re in the right place. Rewards credit cards can be a great way to maximize the value of your spending and get more out of your credit card usage. However, with so many options available, it can be challenging to choose the right one that suits your needs and preferences. That’s where our guide comes in. We’ve researched and analyzed dozens of rewards credit cards to help you find the best options on the market. In this guide, we’ll cover the different types of rewards credit cards, the factors to consider when choosing a rewards credit card, and our top picks for the best cashback, points, and miles rewards credit cards. Whether you’re a frequent traveler, a savvy shopper, or just looking for a simple and straightforward rewards credit card, we’ve got you covered. So, let’s dive in and find the perfect rewards credit card for you!

What are rewards credit cards?

Rewards credit cards are a type of credit card that offers rewards to cardholders based on their spending. These rewards can come in the form of cashback, points, or miles that can be redeemed for various benefits, such as statement credits, travel, merchandise, or gift cards. The amount and type of rewards offered by a rewards credit card can vary depending on the card issuer and the card itself. Typically, rewards credit cards have higher rewards rates or offer more valuable rewards than non-rewards credit cards, making them an attractive option for people who want to earn rewards while making purchases they would have made anyway. However, it’s important to note that rewards credit cards often come with higher fees and interest rates, so it’s crucial to weigh the benefits against the costs before choosing a rewards credit card.

What is a credit card rewards program?

A credit card rewards program is a program offered by credit card companies that provides cardholders with incentives for using their credit card to make purchases. Rewards programs come in different forms, such as cashback, points, miles, or other types of rewards. The amount and type of rewards vary depending on the credit card issuer and the specific card.

Rewards programs encourage credit card usage and provide cardholders with a way to earn something in return for their spending. For example, a cashback rewards program may offer cardholders a certain percentage of their purchases back as cash, while a points program may allow cardholders to accumulate points that can be redeemed for merchandise, travel, or other rewards.

Some credit card rewards programs offer signup bonuses to new cardholders who meet certain spending requirements within a specific timeframe. These bonuses can include cash back, points, or miles, which can help cardholders quickly accumulate rewards.

Credit card rewards programs often have terms and conditions that specify how rewards can be earned, redeemed, and used. These terms may include spending categories that earn higher rewards, expiration dates for rewards, redemption options, and other restrictions.

Overall, credit card rewards programs can be a valuable benefit for cardholders who use their credit cards responsibly and can help offset some of the costs associated with credit card usage, such as interest charges or annual fees. However, it’s important to review the terms and conditions of any rewards program carefully to ensure that it aligns with your spending habits and financial goals.

Benefits of using rewards credit cards

There are several benefits to using rewards credit cards, including:

1. Earning rewards: The primary benefit of using rewards credit cards is earning rewards for your spending. Depending on the card, you may earn cashback, points, or miles that can be redeemed for a variety of rewards, such as statement credits, travel, merchandise, or gift cards. Over time, these rewards can add up and help you save money or enjoy perks and benefits that you wouldn’t have access to otherwise.
2. Sign-up bonuses: Many rewards credit cards offer sign-up bonuses to new cardholders who meet certain spending requirements within a specified timeframe. These bonuses can be substantial, ranging from a few hundred dollars to several thousand dollars, making it a great way to earn a significant amount of rewards quickly.
3. Protection and perks: Rewards credit cards often come with additional perks and benefits, such as extended warranties, purchase protection, travel insurance, and more. These benefits can provide you with additional peace of mind and help you save money on common expenses.
4. Credit building: Using rewards credit cards responsibly can also help you build credit over time. By making on-time payments and keeping your credit utilization low, you can improve your credit score and qualify for better credit offers in the future.
5. Convenience: Finally, rewards credit cards offer the convenience of making purchases without having to carry cash or write checks. With a rewards credit card, you can easily track your spending, view your rewards balance, and make purchases online, in-store, or on-the-go.

Importance of choosing the right rewards credit card

Choosing the right rewards credit card is essential because it can have a significant impact on your finances and lifestyle. Here are some reasons why it’s important to choose the right rewards credit card:

1. Maximizing rewards: The right rewards credit card can help you maximize the rewards you earn for your spending. By choosing a card that offers higher rewards rates for the categories you spend the most on, you can earn more rewards and get more value out of your spending.
2. Minimizing fees: Rewards credit cards often come with annual fees, foreign transaction fees, and other fees that can add up over time. By choosing a card with lower fees or one that offers enough rewards to offset the fees, you can save money and maximize your rewards.
3. Meeting your needs: Different rewards credit cards are designed for different types of spenders and lifestyles. For example, if you travel frequently, a travel rewards credit card may be a better fit for you than a cashback rewards credit card. By choosing a card that aligns with your needs and preferences, you can get the most value out of your rewards.
4. Building credit: Choosing the right rewards credit card can also help you build your credit score and improve your credit history over time. By choosing a card with a low APR and making on-time payments, you can demonstrate responsible credit behavior and improve your creditworthiness.
5. Enjoying perks and benefits: Rewards credit cards often come with additional perks and benefits, such as travel insurance, airport lounge access, and more. By choosing a card that offers perks that align with your lifestyle, you can enjoy additional benefits and get more value out of your spending.

Types of rewards credit cards

There are several types of rewards credit cards available, each offering different rewards and benefits. Here are the most common types of rewards credit cards:

1. Cashback Credit Cards: Cashback credit cards offer cashback rewards on eligible purchases, usually as a percentage of the purchase amount. Cashback can be redeemed for statement credits, gift cards, or deposited into a bank account.
2. Points Credit Cards: Points credit cards earn points for eligible purchases, which can be redeemed for various rewards, such as travel, merchandise, gift cards, or cashback.
3. Miles Credit Cards: Miles credit cards earn miles or points that can be redeemed for travel-related rewards, such as flights, hotel stays, car rentals, and more.
4. Co-branded Credit Cards: Co-branded credit cards are affiliated with specific airlines, hotels, or retailers and offer rewards and benefits related to those brands. Co-branded credit cards can be useful if you frequently use the services of a particular brand.
5. Flexible Rewards Credit Cards: Flexible rewards credit cards allow you to earn and redeem rewards in multiple ways, such as cashback, points, or miles. These cards can be useful if you want the flexibility to choose how you use your rewards.
6. Tiered Rewards Credit Cards: Tiered rewards credit cards offer different rewards rates based on the type of purchase. For example, a card may offer a higher rewards rate for dining and travel purchases but a lower rewards rate for other purchases.
7. Specialty Rewards Credit Cards: Specialty rewards credit cards offer rewards and benefits specific to a particular interest or hobby, such as sports, entertainment, or charitable donations.

When choosing a rewards credit card, it’s important to consider your spending habits and lifestyle to find the card that best fits your needs.

Business rewards credit cards

Business rewards credit cards are credit cards designed specifically for small business owners. These cards offer rewards and benefits that are tailored to business spending, such as bonus points for office supplies, advertising, and telecommunications expenses. Some of the benefits of using a business rewards credit card include:

1. Earning rewards: Business rewards credit cards typically offer rewards programs that provide points, miles, or cash back for every dollar spent on eligible purchases. These rewards can be redeemed for travel, merchandise, statement credits, or other rewards.
2. Increased spending power: A business credit card can provide small business owners with access to additional credit, which can be beneficial for managing cash flow, making purchases, or covering unexpected expenses.
3. Streamlined expense tracking: Business credit cards often come with tools that make it easy to track expenses and categorize spending. This can save time and make it easier to manage business finances.
4. Employee cards: Business credit cards may allow business owners to issue employee cards, which can help streamline expenses and earn additional rewards on employee spending.
5. Business-specific perks: Some business credit cards offer benefits that are tailored to small business owners, such as discounts on business services, access to business events, or free advertising credits.

When comparing business rewards credit cards, it’s important to consider the rewards program, interest rates, fees, credit limit, and other terms and conditions. Business owners should also consider their spending habits and financial goals when choosing a business credit card to ensure that they select a card that meets their needs.

Factors to consider when choosing a rewards credit card

When choosing a rewards credit card, there are several factors to consider to ensure that you get the most out of your card. Here are some key factors to consider:

1. Rewards Program: The rewards program is a crucial factor to consider when choosing a rewards credit card. You want to choose a card that offers rewards that you will actually use. For example, if you travel frequently, a travel rewards card may be a good fit. If you prefer cashback rewards, then a cashback card may be a better option.
2. Rewards Rates: The rewards rate is the percentage of rewards you earn on eligible purchases. Some cards offer flat rewards rates, while others offer tiered rewards rates. Consider your spending habits to determine which card offers the best rewards rate for you.
3. Annual Fees: Many rewards credit cards come with annual fees, which can range from a few dollars to several hundred dollars. Consider whether the rewards and benefits of the card are worth the annual fee.
4. Sign-Up Bonus: Many rewards credit cards offer sign-up bonuses to new cardholders who meet certain spending requirements within a specific timeframe. Consider the value of the sign-up bonus when choosing a card.
5. APR: The APR is the interest rate charged on your outstanding balance. If you plan to carry a balance on your card, consider the APR and choose a card with a low-interest rate.
6. Credit Score: Your credit score plays a crucial role in determining your eligibility for a rewards credit card and the terms you are offered. Consider your credit score and choose a card that aligns with your creditworthiness.
7. Additional Benefits: Many rewards credit cards offer additional benefits, such as travel insurance, extended warranties, purchase protection, and more. Consider these benefits when choosing a card to ensure that you get the most value out of your card.

By considering these factors, you can choose a rewards credit card that aligns with your needs and preferences and helps you earn valuable rewards.

How to compare rewards credit cards

When comparing rewards credit cards, it’s important to consider several factors to determine which card offers the best value for you. Here’s how to compare rewards credit cards:

1. Rewards Program: Compare the rewards programs offered by different credit cards. Look at the type of rewards offered (cashback, points, miles, etc.) and the rewards rates (how much you earn per dollar spent).
2. Annual Fee: Consider the annual fee charged by each card. Make sure the rewards and benefits offered by the card justify the cost of the annual fee.
3. Sign-Up Bonus: Look for credit cards that offer a sign-up bonus, and compare the value of the bonus offered by each card.
4. Introductory Offers: Check if the card offers any introductory offers, such as 0% APR on purchases or balance transfers for a certain period.
5. APR: Compare the APR charged by different cards to find the one with the lowest interest rate.
6. Credit Score: Consider the credit score required to qualify for each card, and ensure that you meet the eligibility criteria.
7. Additional Benefits: Look for additional benefits offered by each card, such as travel insurance, purchase protection, extended warranty, and more.
8. Terms and Conditions: Read the terms and conditions of each card carefully to understand any fees, restrictions, or limitations that may apply.

By comparing these factors, you can determine which rewards credit card offers the best value for your spending habits and preferences. It’s important to choose a card that aligns with your needs and helps you maximize your rewards.

How cash-back rewards credit cards work

Cash-back rewards credit cards offer a percentage of your spending back to you in the form of cash rewards. Typically, you earn a certain percentage of cash back for every dollar you spend, and these rewards can accumulate over time. For example, if your cash-back card offers 2% cash back on all purchases and you spend $1,000, you would earn $20 in cash back rewards.

The cash-back rewards are typically credited to your account at the end of each billing cycle or after you reach a certain threshold. You can use the rewards to offset your credit card bill, redeem them for statement credits, or receive them as a check or direct deposit.

Some cash-back credit cards offer higher rewards rates for specific categories, such as groceries, gas, or dining. These cards may offer 5% cash back in specific categories and 1% cash back on all other purchases. It’s important to read the terms and conditions of the card to understand the rewards structure and any limitations or restrictions that may apply.

It’s important to note that cash-back rewards credit cards may come with an annual fee, so you should ensure that the rewards earned justify the cost of the fee. Additionally, cash-back rewards credit cards typically come with higher interest rates, so it’s important to pay off your balance in full each month to avoid accruing interest charges that may offset the rewards earned.

How travel rewards credit cards work

Travel rewards credit cards offer rewards in the form of points or miles that can be redeemed for travel-related expenses, such as flights, hotels, car rentals, and more. The way these rewards work can vary depending on the credit card issuer and the specific card.

Here are some general guidelines on how travel rewards credit cards work:

1. Earning Rewards: Travel rewards credit cards typically offer a higher rewards rate for travel-related purchases, such as airline tickets or hotel stays. Some cards may also offer bonus points or miles for spending in other categories, such as dining, gas, or groceries.
2. Redeeming Rewards: Travel rewards can usually be redeemed for travel-related expenses, such as flights, hotels, car rentals, and more. Some cards may also offer the option to transfer points or miles to partner loyalty programs.
3. Point/Mile Value: The value of each point or mile can vary depending on the card issuer and the redemption method. Some cards may offer a fixed value for each point or mile, while others may offer a higher value when redeemed for certain travel-related expenses.
4. Annual Fee: Many travel rewards credit cards come with an annual fee, which can range from a few dollars to several hundred dollars. Consider whether the rewards and benefits of the card are worth the annual fee.
5. Sign-Up Bonus: Many travel rewards credit cards offer sign-up bonuses to new cardholders who meet certain spending requirements within a specific timeframe. Consider the value of the sign-up bonus when choosing a card.
6. Travel Benefits: Many travel rewards credit cards offer additional benefits, such as travel insurance, priority boarding, lounge access, and more. Consider these benefits when choosing a card to ensure that you get the most value out of your card.

It’s important to read the terms and conditions of the card carefully to understand the rewards structure, redemption options, and any fees or restrictions that may apply. By using your travel rewards credit card wisely and maximizing the rewards earned, you can save money on travel-related expenses and enjoy a more rewarding travel experience.

Pros and cons of rewards credit cards

Rewards credit cards can be a great way to earn cash back, points, or miles on your everyday spending. However, as with any financial product, there are both pros and cons to using rewards credit cards. Here are some of the advantages and disadvantages of using rewards credit cards:

Pros:

1. Earn rewards on your spending: Rewards credit cards allow you to earn rewards, such as cash back, points, or miles, on your everyday spending. This can help you save money or earn valuable rewards that can be used for travel or other expenses.
2. Sign-up bonuses: Many rewards credit cards offer sign-up bonuses to new cardholders who meet certain spending requirements within a specific timeframe. This can be a great way to earn a large number of rewards quickly.
3. Travel perks: Many rewards credit cards offer travel-related benefits, such as airline miles, hotel discounts, or travel insurance. These perks can be especially valuable if you travel frequently.
4. Cash flow flexibility: By using a rewards credit card for your everyday spending and paying it off in full each month, you can earn rewards without having to tie up your cash in a savings account or other investment.

Cons:

1. High interest rates: Rewards credit cards often come with higher interest rates than non-rewards credit cards. If you carry a balance on your card, you could end up paying more in interest charges than you earn in rewards.
2. Annual fees: Many rewards credit cards charge an annual fee, which can eat into the value of the rewards you earn. Make sure you consider the cost of the annual fee when choosing a rewards credit card.
3. Temptation to overspend: The rewards offered by credit cards can be tempting, which may lead you to overspend and carry a balance on your card. This can result in high interest charges and negate the value of the rewards earned.
4. Complex rewards structures: Some rewards credit cards have complex rewards structures that can be difficult to understand. Make sure you read the terms and conditions of the card carefully to understand the rewards structure and any limitations or restrictions that may apply.

Overall, rewards credit cards can be a great way to earn valuable rewards on your everyday spending. However, it’s important to choose a card that fits your spending habits and to use it responsibly to avoid high interest charges and debt.

How to make the most out of your rewards credit card

Here are some tips to help you make the most out of your rewards credit card:

1. Choose the right card: Choose a rewards credit card that fits your spending habits and offers rewards that you will actually use. Consider the rewards structure, annual fees, and other benefits to find a card that offers the most value for you.
2. Use the card for everyday purchases: Use your rewards credit card for everyday purchases, such as gas, groceries, and bills, to earn rewards on your regular spending.
3. Pay your balance in full: To avoid paying interest charges and negating the value of your rewards, always pay your balance in full and on time.
4. Maximize your rewards: Look for ways to maximize your rewards, such as taking advantage of bonus categories or sign-up bonuses. Some cards also offer additional ways to earn rewards, such as through online shopping portals or partner offers.
5. Redeem your rewards strategically: Choose the right time and method to redeem your rewards. For example, some rewards may be worth more when redeemed for travel, while others may be best used for statement credits or merchandise.
6. Keep an eye on your account: Monitor your account regularly to track your rewards balance, ensure that your rewards are being properly credited, and to stay on top of any changes or updates to your card’s rewards structure.

By following these tips and using your rewards credit card responsibly, you can earn valuable rewards and get the most out of your card.

How to avoid overspending and accruing debt while using rewards credit cards

Using rewards credit cards can be a great way to earn valuable rewards on your spending. However, it’s important to use these cards responsibly to avoid overspending and accruing debt. Here are some tips to help you stay on track:

1. Set a budget: Before you start using your rewards credit card, create a budget that outlines your monthly expenses and income. This will help you avoid overspending and ensure that you can pay off your balance in full each month.
2. Use the card for necessary purchases only: To avoid overspending, use your rewards credit card for necessary purchases only, such as groceries, gas, and bills. Avoid using the card for discretionary spending or purchases that you can’t afford to pay off in full.
3. Pay off your balance in full each month: To avoid accruing interest charges and debt, always pay off your balance in full and on time. If you’re unable to pay off your balance in full, try to pay more than the minimum payment to reduce your debt.
4. Monitor your account regularly: Keep track of your spending and account activity by monitoring your account regularly. This will help you avoid overspending and ensure that your rewards are being credited properly.
5. Avoid carrying a balance: Carrying a balance on your rewards credit card can lead to high interest charges and debt. If you can’t pay off your balance in full each month, consider using a 0% APR balance transfer card to consolidate your debt and pay it off interest-free.

By following these tips and using your rewards credit card responsibly, you can avoid overspending and accruing debt while still earning valuable rewards on your spending.

Do credit card rewards expire?

Whether or not credit card rewards expire depends on the terms and conditions of the particular credit card program. Some credit card rewards, such as cash back or points, may have an expiration date, while others may not expire as long as the account remains open and in good standing.

If your credit card rewards do have an expiration date, it’s important to be aware of when those rewards will expire so you can use them before they are lost. Some credit card issuers may provide advance notice of impending reward expirations, while others may not.

Additionally, some credit card rewards programs may require you to use a certain amount of rewards within a certain timeframe to keep your rewards active. For example, you may need to redeem a minimum number of points each year to keep your account active and prevent rewards from expiring.

Before applying for a rewards credit card, be sure to review the terms and conditions of the rewards program to understand how rewards are earned, redeemed, and when they expire. By staying informed and proactive, you can make the most of your rewards and avoid losing them due to expiration.

Are credit card rewards considered taxable income?

Credit card rewards are generally not considered taxable income by the IRS in the United States, as long as they are considered to be rebates or discounts on purchases and not income.

For example, if you receive cash back rewards on your credit card, that money is generally considered a rebate or discount on your purchases and not income. As such, it is not taxable. Similarly, if you receive points or miles rewards for travel, those rewards are generally not considered taxable income, since they are considered to be a discount on your travel expenses.

However, there may be exceptions to this rule. For example, if you receive rewards as part of a signup bonus or promotional offer, the value of those rewards may be considered taxable income. Additionally, if you use your rewards to purchase items that you later resell, the value of those rewards may be considered taxable income.

It’s important to consult with a tax professional to determine your specific tax obligations related to credit card rewards, as the tax laws and regulations can be complex and may vary depending on your individual circumstances.

Who should apply for a rewards credit card?

Rewards credit cards are a good fit for those who:

1. Pay off their balance in full each month: If you don’t carry a balance on your credit card, you can avoid interest charges and other fees, making it easier to maximize your rewards.
2. Have good or excellent credit: Rewards credit cards typically require good or excellent credit scores, which can help you qualify for higher credit limits and better rewards.
3. Spend regularly: If you use your credit card for everyday purchases, such as groceries, gas, bills, and other expenses, you can earn rewards for spending you would be doing anyway.
4. Can meet the spending requirements for the signup bonus: Many rewards credit cards offer a signup bonus after you spend a certain amount within a specified timeframe. If you can meet the spending requirements, you can earn a significant amount of rewards upfront.
5. Are comfortable managing multiple credit cards: Some people enjoy using multiple credit cards to maximize their rewards and take advantage of different rewards categories. If you’re comfortable managing multiple cards and keeping track of rewards programs, you may benefit from using rewards credit cards.

However, rewards credit cards are not a good fit for those who:

1. Carry a balance: If you carry a balance on your credit card, the interest charges and fees may negate the rewards you earn, making it difficult to benefit from using a rewards credit card.
2. Have poor credit: If you have a low credit score, you may not qualify for rewards credit cards or may be offered less attractive rewards and higher interest rates.
3. Don’t spend enough to justify the annual fee: Some rewards credit cards charge annual fees, which can be worthwhile if you earn enough rewards to offset the cost. However, if you don’t spend enough to justify the annual fee, you may be better off with a no-fee credit card.

Ultimately, the decision to apply for a rewards credit card depends on your spending habits, credit history, and financial goals. Be sure to review the terms and conditions of the rewards program carefully before applying to ensure that the rewards and benefits align with your needs and preferences.

The future of rewards credit cards

The future of rewards credit cards is likely to continue evolving as credit card issuers adapt to changing consumer preferences and behaviors. Here are some potential trends that could shape the future of rewards credit cards:

1. Increased personalization: Credit card issuers may continue to offer rewards programs that are tailored to individual cardholders’ spending habits and preferences. This could include personalized offers, targeted rewards, and customized redemption options.
2. Emphasis on digital rewards: As more consumers shift toward digital and mobile payments, credit card issuers may focus on offering rewards that can be easily redeemed and used online or through mobile apps.
3. Greater focus on sustainability and social responsibility: Credit card issuers may increasingly incorporate sustainability and social responsibility into their rewards programs, such as offering rewards for eco-friendly purchases or donations to charitable organizations.
4. Integration with other financial services: Credit card issuers may look to integrate rewards programs with other financial services, such as banking, investing, or budgeting apps, to provide a more seamless and comprehensive financial experience for consumers.
5. Use of emerging technologies: Credit card issuers may leverage emerging technologies such as blockchain, artificial intelligence, or biometrics to enhance rewards programs and improve security and fraud prevention.

Overall, the future of rewards credit cards will likely be shaped by consumer preferences, technological advancements, and economic conditions. Credit card issuers will need to continue innovating and adapting to meet the changing needs and expectations of consumers in order to remain competitive in the market.

FAQs about rewards credit cards