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Best Rewards Credit Cards Of March 2019 – Get More Bang For Your Buck

You can trust the integrity of our balanced, independent financial advice. We may, however, receive compensation from the issuers of some products mentioned in this article. Opinions are the author's alone, and this content has not been provided by, reviewed, approved or endorsed by any advertiser.

Whether you’re looking for travel, gas, or cash back rewards, there’s a credit card out there for you! Here are our favorite rewards credit cards.

Rewards are a credit card issuers way of saying “we want your business!” And since so many credit cards offer rewards, it can be generally assumed they all want your business. That puts you in a position of being able to select from a long list of very attractive rewards offers. It all comes down to finding the best rewards credit cards for you.

We’re here to help you do that. And since no one credit card provides the best rewards program across the board—with the exception of the first card on our list—we’ve broken it down into categories.

Rewards credit cards really come down to which package will work best for you. That depends on your overall credit card activity, your specific spending patterns, and of course, your ability to qualify for the card you want.

Best rewards credit cards overview

Editor’s Choice, March 2019:

Best card for all around rewards

Wells Fargo Propel American Express(R) Card

Wells Fargo Propel American Express® Card

Credit Needed: Excellent/Good
  • Earn 30K bonus points when you spend $3,000 in purchases in the first 3 months - that's a $300 cash redemption value
  • Earn 3X points for eating out and ordering in
  • Earn 3X points for gas stations, rideshares and transit
Intro APR
Purchases
Intro Term
Purchases
Intro APR
Balance Transfers
Intro Term
Balance Transfers
Regular APRAnnual Fee
0%12 months0%12 months14.74%-27.24% (Variable)$0

The Wells Fargo Propel Card is a great all around rewards credit card, because it offers 3X the points back on our most frequent purchases: travel, eating out, and gas station purchases.

Plus, it has a great sign-up bonus of 30,000 bonus points when you spend $3,000 in the first three months of owning the card.

Card rewards:

  • 3x rewards points (two bonus points + one standard rewards point) for every dollar you spend on travel, eating out, and gas station purchases
  • 3x points (two bonus points + one standard rewards point) for streaming services including Apple Music, Hulu, Netflix, Pandora, and Spotify Premium
  • 1 point per dollar on all other purchases
  • 30,000 bonus points when you spend $3,000 in the first three months of owning the card

Card highlights:

  • Introductory APR: 0%
  • Introductory term: 12 months
  • Regular APR: 14.74%-27.24% (Variable)
  • Annual fee: $0
  • Credit needed: Good to Excellent (700+)

See card details/apply or read our full Wells Fargo Propel review.

Best card for premium travel rewards

Bank of America(R) Premium Rewards credit card

Bank of America® Premium Rewards® credit card

Credit Needed: Excellent/Good
  • Receive 50,000 bonus points – a $500 value – after you make at least $3,000 in purchases in the first 90 days of account opening.
  • Earn unlimited 2 points for every $1 spent on travel and dining purchases and unlimited 1.5 points per $1 spent on all other purchases
  • If you’re a Bank of America Preferred Rewards client, you can get a 25%-75% rewards bonus on every purchase.
Intro APR
Purchases
Intro Term
Purchases
Intro APR
Balance Transfers
Intro Term
Balance Transfers
Regular APRAnnual Fee
N/AN/AN/AN/A18.24% - 25.24% Variable APR on purchases$95

The Bank of America(R) Premium Rewards credit card offers many of the same rewards as Chase Sapphire Preferred(R).

The upfront bonus is 50,000 points after you spend at least $3,000 in the first 90 days—worth $500. You then get 2X points on travel and dining, and 1.5X on all other purchases.

Travel benefits include up to $500 per ticket purchased for you and your eligible family members for reasonable expenses on covered trips delayed for at least 12 hours.

Card rewards:

  • 50,000 bonus points ($500) after you make at least $3,000 in purchases in the first 90 days of opening your account
  • 2X points on travel and dining purchases
  • 1.5X points on all other purchases
  • No blackout dates or restrictions, and points do not expire
  • Points can be redeemed as statement credits, gift cards, or to purchase travel through Bank of America Travel Center

Card highlights:

  • Introductory APR: N/A
  • Introductory term: N/A
  • Regular APR: 18.24% - 25.24% Variable APR on purchases
  • Annual fee: $95
  • Credit needed: Good to Excellent (700+)

See card details/apply or read our full Bank of American(R) Premium Rewards credit card review.

Best card for dining rewards

Capital One(R) Savor(R) Cash Rewards Credit Card

This offer requires Excellent/Good credit.

    Card Highlights

    • Earn a one-time $500 cash bonus after you spend $3000 on purchases within the first 3 months from account opening
    • Earn unlimited 4% cash back on dining and entertainment, 2% at grocery stores and 1% on all other purchases
    • Receive a monthly statement credit for a Postmates Unlimited monthly membership through Dec. 2019 with the Capital One Savor Card
    • View Capital One(R) Savor(R) Cash Rewards Credit Card details and how to apply »

The Capital One(R) Savor(R) Cash Rewards Credit Card is perfect for those who eat our often. It offers 4% cash back on dining and entertainment, plus 2% cash back on groceries, and 1% on all other purchases.

It also offers a great sign-up bonus of $500 after you spend $3,000 on purchases within the first three months from account opening.

With the Capital One(R) Savor(R) Credit Card, your cash back never expires and there’s no cap on how much you earn!

Card rewards:

  • 4 percent back on dining and entertainment
  • 2 percent on groceries
  • 1 percent on everything else
  • $500 sign-up bonus after you spend $3,000 on purchases within the first three months from account opening

Card highlights:

  • Introductory APR: N/A
  • Introductory term: N/A
  • Regular APR: 16.74% - 25.74% (Variable)
  • Annual fee: $0 intro for first year; $95 after that
  • Credit needed: Good to Excellent (700+)

See card details/apply or read our full Capital One(R) Savor(R) Review.

Best card for cash back rewards

Discover it(R) Cash Back

Discover it® Cash Back

Credit Needed: Excellent, Good
  • INTRO OFFER: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.
  • Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com and more up to the quarterly maximum, each time you activate.
  • Plus, earn unlimited 1% cash back on all other purchases - automatically.
Intro APR
Purchases
Intro Term
Purchases
Intro APR
Balance Transfers
Intro Term
Balance Transfers
Regular APRAnnual Fee
0%14 months0%14 months14.24% - 25.24% Variable$0

Discover it(R) Cash Back gets top honors as the best cash back card. The 5% cashback on select quarterly categories is worth up to $75 per quarter when you activate—that’s $300 per year. And that’s just the start. You then get 1% cash back on all other purchases.

You also get a Cashback MatchTM on all cash back you’ve earned your first year.

Discover it(R) Cash Back also comes with standard Discover features:

Card rewards:

  • Earn five percent cashback on select categories each quarter, including gas stations, grocery stores, restaurants, Amazon.com or wholesale clubs—up to $1,500 in purchases per quarter when you activate
  • One percent cashback on all other purchases
  • Cashback MatchTM on all cashback you’ve earned at the end of your first year
  • Redeem your rewards for cash at any time
  • Cashback never expires

Card highlights:

  • Introductory APR: 0%
  • Introductory term: 14 months
  • Regular APR: 14.24% - 25.24% Variable
  • Annual fee: $0
  • Credit needed: Good to Excellent (700+)

See card details/apply or read our full Discover it(R) Cash Back review.

Best card for travel rewards

Chase Sapphire Preferred(R)

Chase Sapphire Preferred® Card

Credit Needed: Excellent Credit
  • 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®
  • Chase Sapphire Preferred named "Best Credit Card for Flexible Travel Redemption" - Kiplinger's Personal Finance, June 2018
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
Intro APR
Purchases
Intro Term
Purchases
Intro APR
Balance Transfers
Intro Term
Balance Transfers
Regular APRAnnual Fee
N/AN/AN/AN/A18.24% - 25.24% Variable$0 Intro for the First Year, then $95

With the Chase Sapphire Preferred(R), you earn 50,000 bonus points—worth $500—when you spend at least $4,000 in the first three months. But that bonus expands to $625 when you use the points for travel redeemed through Chase Ultimate Rewards(R).

The Chase Sapphire Preferred(R) credit card allows you to transfer points to various airlines and hotels on a 1:1 basis. Providers include British Airways, Southwest, United, Virgin Atlantic, Marriott and Hyatt.

The card also offers a full menu of travel related benefits, including no foreign transaction fees and auto rental collision damage waiver.

Card rewards:

  • 50,000 bonus points after spending $4,000 on purchases in the first three months, good for $625 for travel when redeemed through Chase Ultimate Rewards(R)
  • 2X points on travel and dining
  • 1X points on all other purchases
  • 25 percent more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards

Card highlights:

  • Introductory APR: N/A
  • Introductory term: N/A
  • Regular APR: 18.24% - 25.24% Variable on both purchases and balance transfers
  • Annual fee: $0 Intro for the First Year, then $95
  • Credit needed: Good to Excellent (700+)

See card details/apply or read our full Chase Sapphire Preferred(R) review.

Best credit card sign-up bonus

Wells Fargo Cash Wise Visa(R) Card

Wells Fargo Cash Wise Visa® Card

Credit Needed: Excellent/Good
  • Earn a $200 cash rewards bonus after spending $1,000 in the first 3 months
  • Earn unlimited 1.5% cash rewards on purchases
  • Enjoy 1.8% cash rewards on qualified mobile wallet purchases, like Apple Pay® or Google Pay™, during the first 12 months from account opening
Intro APR
Purchases
Intro Term
Purchases
Intro APR
Balance Transfers
Intro Term
Balance Transfers
Regular APRAnnual Fee
0%12 months0%12 months16.24%-28.24% (Variable)$0

The Wells Fargo Cash Wise Visa(R) Card doesn’t offer the biggest upfront bonus, but it’s by far the easiest to qualify. They offer a $200 cash rewards bonus after spending just $1,000 in the first three months.

The Wells Fargo Cash Wise Visa(R) also offer unlimited 1.5 percent cash rewards on all other purchases—and 1.8 percent when you pay with a qualified mobile wallet.

You also get cell phone protection—up to $600 when you pay your monthly phone bill using the card.

Card rewards:

  • $200 cash rewards bonus after spending $1,000 on purchases within the first three months of opening your account
  • Unlimited 1.5 percent cash rewards on purchases
  • 1.8 percent cash rewards when you make purchases using a qualified mobile wallet, like Apple Pay or Google Pay, within the first 12 months of opening your account
  • Cash rewards don’t expire
  • Cash rewards can be redeemed in $20 increments at Wells Fargo ATM’s, or direct deposited into your Wells Fargo savings or checking account

Card highlights:

  • Introductory APR: 0%
  • Introductory term: 12 months
  • Regular APR: 16.24%-28.24% (Variable)
  • Annual fee: $0
  • Credit needed: Good to Excellent (700+)

See card details/apply or read our full Wells Fargo Cash Wise Visa(R) Card review.

Best card for student rewards

Discover it(R) Student Cash Back

Discover it® Student Cash Back

Credit Needed: Fair
  • INTRO OFFER: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.
  • Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com and more up to the quarterly maximum, each time you activate. Plus, earn unlimited 1% cash back on all other purchases – automatically.
  • Good Grades Rewards: $20 statement credit each school year your GPA is 3.0 or higher for up to the next 5 years.
Intro APR
Purchases
Intro Term
Purchases
Intro APR
Balance Transfers
Intro Term
Balance Transfers
Regular APRAnnual Fee
0%6 months10.99%6 months15.24% - 24.24% Variable$0

The Discover it(R) Student Cash Back enables you to earn 5% cashback on select categories each quarter when you activate. And you get a Cashback MatchTM on all cash back you’ve earned at the end of the first year. From there, you get unlimited 1% cash back on everything else.

They also provide a Good Grades Reward of $20 per year when you maintain good grades—in each of the first five years.

There’s also:

  • No annual fee
  • $0 liability for unauthorized transactions
  • Paying late won’t raise your APR
  • No late payment fee on your first late payment (then $37)
  • Free TransUnion FICO Score

Card rewards:

  • Earn five percent cashback on select categories each quarter, including gas, groceries, restaurants, Amazon.com or wholesale clubs—up to $1,500 in purchases per quarter when you activate
  • Unlimited one percent cash back on all other purchases
  • Good Grades Rewards—$20 statement credit each school year your GPA is 3.0 or higher, for up to five years
  • Cashback MatchTM on all cash back you’ve earned at the end of your first year
  • Redeem your rewards for cash at any time
  • Rewards don’t expire

Card highlights:

  • Introductory APR: 0%
  • Introductory term: Six months
  • Regular APR: 15.24% - 24.24% Variable
  • Annual fee: $0
  • Credit needed: Fair to Average (600 to 699)

See details/apply 0r read our full Discover it(R) Student Cash Back review

Best card for poor credit

Credit One Bank(R) Unsecured Visa(R) with Cash Back Rewards

Credit One Bank® Unsecured Visa® with Cash Back Rewards

Credit Needed: Bad Credit
  • See if you Pre-Qualify in less than 60 seconds–without affecting your credit score. It's fast, easy, and secure.
  • Get 1% cash back rewards on eligible purchases including gas, groceries, and services such as mobile phone, internet, cable and satellite TV. Terms apply.
  • This is a fully functional, unsecured credit card–not a debit card, prepaid card, or secured credit card with deposit requirements.
Intro APR
Purchases
Intro Term
Purchases
Intro APR
Balance Transfers
Intro Term
Balance Transfers
Regular APRAnnual Fee
N/AN/AN/AN/A20.24% - 26.24% Variable$0 - $99

The Credit One Bank(R) Unsecured Visa(R) with Cash Back Rewards is designed specifically for people with bad credit.

Not only does it come with cash back rewards, but the card is fully unsecured. This is unlike many credit builder type credit cards, that only grant credit lines on a secured basis. In addition, your account will be automatically monitored every month for potential credit line increases.

As you might expect with a credit card for bad credit, the card comes with a couple of stiff limitations.

  • Your initial minimum credit line may be no more than $300
  • The annual fee is 25 percent of your credit limit, or $75 in the first year. In subsequent years, it can be as high as $99 per year.

Card rewards:

  • One percent cash back rewards for eligible purchases, including gas, groceries, and payments for mobile phone, Internet, cable, and satellite TV services
  • Rewards will post your account automatically

Card highlights:

  • Introductory APR: N/A
  • Introductory term: N/A
  • Regular APR: 20.24% - 26.24% Variable
  • Annual fee: $0 - $99
  • Credit needed: Poor (Below 600)

See card details/apply or read our full Credit One Bank(R) Unsecured Visa(R) review.

Best card for small business

Capital One(R) Spark(R) Cash for Business

This offer requires Excellent/Good credit.

    Card Highlights

    • Earning unlimited 2% cash back could mean thousands of dollars each year going back into your business
    • Plus, a one-time $500 cash bonus once you spend $4,500 on purchases within 3 months from account opening
    • Use Spark Cash across all your business spend, with no categories to limit your purchasing
    • View Capital One(R) Spark(R) Cash for Business details and how to apply »

The Capital One(R) Spark(R) Cash for Business won honors for best business card, and it was an easy choice. Their cash rewards package is AMAZING: $500 when you spend $4,500 in purchases in the first three months. Plus unlimited 2% cash back on all purchases.

What’s more, you can get free employee cards, with the ability to earn rewards from their purchases. Your employees spend, and you get the cash back!

The card also offers:

  • $0 liability on unauthorized transactions
  • No foreign transaction fees
  • Auto rental collision damage waiver

Card rewards:

  • $500 Cash Bonus when you spend $4,500 on purchases within the first three months of opening your account.
  • Unlimited two percent cash back on every purchase

Card highlights:

  • Introductory APR: N/A
  • Introductory term: N/A
  • Regular APR: 19.24% (Variable)
  • Annual fee: $0 intro for first year; $95 after that
  • Credit needed: Excellent (700+)

See card details/apply or read our full Capital One(R) Spark(R) Cash for Business review.

Best card for balance transfers

Capital One(R) Quicksilver(R) Cash Rewards Credit Card

This offer requires Excellent/Good credit.

The Capital One(R) Quicksilver(R) Cash Rewards Credit Card easily won the best balance transfer category. Not only do you get 15 months at 0 percent APR, but the balance transfer fee is just three percent. That’s on the lowest end of the industry average.

But the Capital One(R) Quicksilver(R) Cash Rewards Credit Card also has a solid rewards program. You get a $150 one-time cash bonus after spending just $500 in purchases within the first three months. After that, you get 1.5 percent unlimited cash back on purchases.

The card also comes with:

  • Shopping discounts at retailers and online merchants with your Visa(R) Signature card
  • Auto collision damage waiver
  • $0 liability on unauthorized purchases.

Card rewards:

  • $150 one-time cash bonus once you spend $500 on purchases within three months of opening your account
  • 1.5% unlimited cash back on purchases
  • Cash back can be redeemed at any time
  • Rewards have no expiration for the life of your account

Card highlights:

  • Introductory APR: 0%
  • Introductory term: 15 months
  • Regular APR: 16.24% - 26.24% (Variable)
  • Annual fee: $0
  • Credit needed: Good to Excellent (700+)

See card details/apply or read our full Capital One(R) Quicksilver(R) review.

Best card for gas rewards

Discover it(R) Chrome

Discover it® chrome

Credit Needed: Excellent, Good
  • INTRO OFFER: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.
  • Earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases - automatically.
  • Redeem your cash back for any amount, any time. Cash rewards never expire.
Intro APR
Purchases
Intro Term
Purchases
Intro APR
Balance Transfers
Intro Term
Balance Transfers
Regular APRAnnual Fee
0%14 months0%14 months14.24% - 25.24% Variable$0

Discover it(R) Chrome gives you 2% cashback at gas stations and restaurants on up to $1,000 in purchases per quarter when you activate. If you dine out frequently, or you use a lot of gas, this is the card for you. You also get 1% cash back on everything else.

But that’s not all. Discover it(R) Chrome also provides an unlimited Cashback MatchTM on all cash back earned in your first year.

The usual Discover benefits include:

  • Paying late won’t raise your APR
  • No late fee on your first late payment
  • No foreign transaction fees
  • Free TransUnion FICO Score

Card rewards:

  • Two percent cashback at gas stations and restaurants on up to $1,000 in combined purchases each quarter
  • One percent cashback on all other purchases
  • Unlimited Cashback MatchTM on all the cashback you earned at the end of your first year
  • Cash rewards can be redeemed in cash in any amount, and at any time

Card highlights:

  • Introductory APR: 0% for the first six months
  • Regular APR: 14.24% - 25.24% Variable
  • Annual fee: $0
  • Credit needed: Good to Excellent (700+)
  • Rewards never expire

See card details/apply.

Summary of the best rewards credit cards

Card NameCredit NeededRewardsUnique Features
Editor's Choice, March 2019:
Wells Fargo Propel American Express(R) Card
700+
3X at restaurants, gas stations, rideshare, transit, travel; 1X on everything else30,000 bonus points when you spend $3,000 in the first three months of owning the card

Bank of America(R) Premium Rewards(R) Credit Card
700+
2X on travel and dining, 1.5X on everything else
Travel benefits include up to $500 per ticket
Capital One(R) Savor(R) Cash Rewards Credit Card
700+
4% on dining and entertainment, 2% at grocery stores, 1% on everything else$500 after you spend $3,000 on purchases within the first three months from account opening
Discover it(R) Cash Back
700+
5% on quarterly categories, 1% on everything else
Discover will match all the cash back you've earned at the end of your 1st year
Chase Sapphire Preferred(R) Card
700+
2X on travel and dining, 1X on everything elseNo foreign transaction fees and auto rental collision damage waiver
Wells Fargo Cash Wise Visa(R) Card
700+
1.5X on everythingUp to $600 in cell phone protection when you pay your monthly phone bill using the card
Discover it(R) Student Cash Back
650+
5% on quarterly categories, 1% on everything else
Good Grades Reward of $20 per year when you maintain good grades
Credit One Bank(R) Unsecured Visa(R) with Cash Back Rewards
350
1% on gas, groceries, payments for mobile phone, Internet, cable, and satellite TV services
It's designed specifically for people with bad credit
Capital One(R) Spark(R) Cash for Business
700+
2% cash back on everything
Free employee cards, with the ability to earn rewards from their purchases
Capital One(R) Quicksilver
600+
1.5% cash back on everythingShopping discounts at retailers and online merchants with your Visa(R) Signature card
Discover it(R) Chrome
700+
2% cash back at gas stations and restaurants; 1% on everything elseDiscover will match all the cash back you've earned at the end of your 1st year

Methodology: How we came up with the list

To come up with our list of the best rewards cards in each of the 10 categories above, we used the following methodology in our selections:

  • Total upfront bonus rewards
  • Ongoing rewards
  • Other noteworthy bonus enhancements, like a cash back match
  • The rewards specializations of each card

And naturally, we also look beyond the rewards themselves. After all, it will do you little good to get generous rewards if the cost of having the card exceeds those rewards.

In that regard, we also considered the following factors:

  • Introductory APR offers, as well as the term of the offer
  • The presence or absence of an annual fee
  • Other card benefits provided
  • The frequency of each of the above credit cards appearing on the many “Best for” lists, both on Money Under 36 and on other popular credit card review sites

The different types of reward credit cards

As you’ll see in this list, there are many different reward types to choose from. Which one you choose depends on personal preference, but here’s some info about each to help you decide which works best for you.

General cash back

Cash back is exactly what it sounds like. You get cash back on every purchase. Some cards offer one cash back rate on all purchases, which are best for those looking for an easy-to-use, straightforward cash back program. These cards, however, offer lower cash back percentages than those who focus on certain categories.

Cash back cards that offer higher cash back in certain categories (many times it’s five percent) are for those who spend in one area. Many five percent cash back cards offer the following categories (I’m basing these on the Discover it(R) Cash Back):

  • Gas stations
  • Grocery stores
  • Restaurants
  • Amazon
  • Wholesale clubs

Travel

When you earn travel rewards from your credit cards you can typically redeem those rewards (often in points or miles) for travel expenses like flights and hotel stays.

Travel rewards are broken down further into three categories: general travel, airline, and hotel credit cards.

General travel rewards programs are the more flexible of the three and offer points or miles on just about any type of travel. Airline credit cards are co-branded with a specific airline, giving you points or miles with that airline. Hotel cards are a lot like airline cards, except they focus on hotels rather than airline miles.

Gas

Cards that offer gas rewards are cash back cards that often offer 3-5 percent back or up to 6 cents off on gas station purchases. Gas cards also tend to offer other reward categories with lower cash back.

Here are our favorite gas rewards cards.

Dining

When you have a credit card that offers great dining rewards, you’ll receive up to 4 percent cash back on dining and entertainment purchases (depending on the card, of course). Gas and dining credit cards often go hand in hand, but not always.

Student

Student rewards credit cards are geared towards students who have a limited credit history. They offer many of the same rewards that other cash back credit cards offer.

Plus, student credit cards usually offer rewards for good grades (like the Discover it(R) Student Cash Back).

How to choose a rewards program

Simply choosing a credit card because it has great rewards won’t necessarily work in your favor. You must be certain rewards offered are consistent with your own lifestyle, spending patterns, and personal preferences.

For example, if you don’t travel frequently, a card that offers generous travel rewards won’t work for you. Similarly, if a credit card specializes in rewards for gas and restaurants, you probably won’t want that card if you work from home, and don’t dine out frequently.

You must also consider your primary purpose in getting a credit card at all. For example, cashback rewards may be attractive, but if your main purpose is to get a 0 percent balance transfer card to consolidate high interest cards, then you’ll need to look primarily at the balance transfer part of the offer. Rewards, if offered, are only a secondary consideration.

And finally, there’s qualification. While there are rewards credit cards for people with less than perfect credit, the most generous offers are for those in the good-to-excellent credit range.

Who rewards are for

An even more basic factor is your credit card use. Rewards cards are only effective for people who make frequent use of credit cards. If you’re not a credit card user, you won’t reap the benefits the rewards provide.

You should also be able to take full advantage of upfront rewards bonuses

Since they usually require a large amount of purchases within the first three months, you should be fully prepared to concentrate your spending through that one card.

If you have 10 other credit cards, you’ll have to put them away for at least three months.

Rewards credit cards are an excellent tool for anyone looking to save money

If the rewards apply to spending you would do otherwise, and you don’t carry balances, rewards cards can help lower your expenses. A card that offers two percent cash back on all purchases will lower your expenses by two percent across the board.

And as just noted, rewards credit cards work best for people with good or excellent credit

Card issuers reserve the most generous rewards programs for stronger credit profiles. While it’s still possible to get rewards cards for less-than-perfect credit, they may be more of a bonus benefit than a primary reason for taking the card.

If you have poor credit, the primary purpose of any credit card is to rebuild your credit. Rewards should fall under the “everything else being equal” doctrine—if two cards provide the ability to rebuild your credit, and one provides rewards, that’s usually the card you should select.

How rewards work

Credit card issuers don’t provide rewards just to be kind. They’re an inducement to get your credit card business. In effect, rewards act as a rebate on your spending. Since a credit card company makes money every time you use their card, they can pay you a reward out of their revenue. How much of a reward they pay depends on how much they want your business.

Purchases eligible for rewards can either be specific or general. For example, revolving quarterly categories are product specific. General rewards apply to all purchases.

A credit card issuer can pay rewards in either cash (or cash equivalents, like statement credits) or points. Points are sometimes convertible into cash, but are generally redeemable in certain spending categories, typically travel.

Apart from knowing how much your rewards will be, you should also know what your options are for redemption.

They can include any one or a combination of the following:

  • Statement credits
  • Gift cards
  • Specific spending categories, like travel
  • Credits to other accounts with the same institution (see Wells Fargo)
  • ATM withdrawals, though this is not common (again, see Wells Fargo)

Be sure you understand exactly how a credit card issuer will redeem your rewards. It should match your preference. For example, if you want to use rewards to pay down your credit card balance, you’ll want to be sure they’re available through statement credits.

Why you should use a rewards credit card

The most beneficial way to use a rewards credit card is when those rewards apply specifically to purchases you ordinarily make. You can use the card to reduce your expenses.

For example, if a card offers a $500 cash bonus on $5,000 spent within three months, it should be consistent with how much you would or could pay by credit card. This kind of rewards bonus works best for those who use credit cards for general expenses, as well as purchases

You’ll certainly use your card for routine activity, like purchasing gas, groceries, and entertainment. But you may also use it to pay recurring bills, like utilities, insurance premiums and other services.

If you can comfortably fit your normal spending within the $5,000 limit, the $500 bonus means you’ll be reducing those expenses by 10 percent.

The same is true with ongoing cash rewards. If the card offers two percent cash back as a permanent feature, you’ll reduce your spending by two percent. For example, if you normally use your credit cards for spending of $20,000 per year, two percent cash back saves you $400 per year.

And once again, the real benefit of a rewards credit card depends on your willingness and ability to not carry interest-bearing balances.

What you should know & what to look for

When shopping for a rewards credit card, consider each offer within the context of the bigger picture of your life.

For example…

Avoid applying for credit cards that have rewards similar to a card you already have

If you already have a card that provides two percent cash back on restaurant purchases up to $1,000 per quarter, and you’re unlikely to exceed that spending level, there’s no point getting a second card with an identical benefit. A better strategy is to get a card that specializes in a different spending category.

Don’t focused solely on an attractive bonus offer

You may be better served by a card providing ongoing two percent cash back on all purchases, than one that offers a $300 bonus in the first three months, then reverts to one percent on subsequent purchases.

Don’t ignore secondary features

If car rentals are a significant part of your normal credit card spending pattern, you’ll want a card that offers auto rental collision damage waiver (fortunately, most do—but never assume it).

No matter how good the rewards offer is, you’ll be leaving money on the table if you must use another card for car rentals.

The small print – an important read!

Before signing up for a rewards credit card, first read the card card agreement line by line. Look for any “gotcha” restrictions in the document. No matter how attractive the advertising on the card may look, the real truth is always in the legal disclosures.

Some provisions to be aware of:

Look for any potential limits on rewards

These are common on quarterly rewards categories. For example, the card may pay five percent, but purchases for the quarter are limited to $1,000.

Be aware of exclusions

A card offering rewards for gas purchases may exclude gas purchased at wholesale clubs, like Sam’s Club and Costco.

Limited merchant participation

A card may provide generous cash back on purchases through a limited number of hotels. If you don’t normally use the hotels included, you probably won’t use the rewards.

Rewards that require extra action on your part

A credit card may require you to claim certain rewards. Be aware of which rewards those are, and set a tickler to alert you to make the claim.

Rewards expiration

Somewhere buried in the fine print may be a provision specifying rewards expire if not used within one year of being earned, or some other timeframe. If you’re in the habit of allowing rewards to accumulate, this can be a deal breaker.

On a more general level, be aware that rewards programs can change. Credit card agreements typically have language that permits the issuer to modify or even cancel rewards with little notice. Pay close attention to any official looking documents you receive from the issuer that you might otherwise ignore. You could continue happily spending in anticipation of rewards that were canceled months ago.

How to save money maximizing your rewards

There are two major considerations to maximizing your rewards:

The rewards should match your regular spending habits

A rewards credit card should never encourage you to spend more than you ordinarily would.

For example, if a card offers $300 cash back for spending $3,000 within the first three months, that shouldn’t send you on a spending spree to buy things you normaly wouldn’t. You may get the $300 reward, but you’ll spend $3,000 you didn’t need to spend. You’ll end up spending more than your getting in rewards.

The cost of the card shouldn’t exceed the benefit of the rewards

Credit card rewards are best for people who don’t carry balances. If you’re spending on the card to get rewards, and you’re carrying a balance at 20 percent interest, you’ll payout 10 times more in interest than you get with two percent cash back.

Also, always remember that while rewards are paid when earned, interest is charged until your balance is paid. That means you’ll be paying 20 percent on the outstanding balance in each year it’s owed.

The best use for a rewards credit card is for spending you would do even without the card, then not carrying a balance. In that case, a two percent cash back reward will be a 100 percent benefit. There’ll be no interest expense offsetting the reward.

FAQs

Don’t annual fees reduce the rewards?

Yes, but it’s not necessarily a deal breaker. For example, if you normally spend $20,000 per year on your credit card, a one percent cash back card with no annual fee will save you $200 per year. But a two percent cash back card with a $95 annual fee will save you $305 ($400 less the annual fee). In that case, you’ll be better off taking the card with the annual fee.

Which is better, cash or points?

Generally, cash. You can use it for any purpose. Points are sometimes redeemable for cash, but they’re more typically tied to specific purchases, like air travel. If you’re not a frequent traveler, the points won’t help you much.

How many rewards credit cards should I have?

If you have a card that provides a generous ongoing rewards payout, you might be fine with just that one card. But from time to time, you might want to add a card that provides a particularly large upfront bonus. Not only will you get the advantage of the bonus, but the additional credit line(s) will increase your available credit, helping your credit score by lowering your credit utilization ratio.

Other than closing out my account, is there any way I could forfeit my rewards?

Yes, several. The card issuer could terminate the program. They would have to give you advance notice. However, there may also be language in the credit card agreement that results in forfeiture of your rewards if you make one or more late payments.

Credit card rewards seem like found money – is there any downside?

Absolutely:

  • If you normally carry credit card balances, the interest expense on the card could exceed the rewards you’re getting.
  • Rewards could encourage you to spend money you otherwise wouldn’t.
  • Rewards could cause you to run up your credit card balances, under the mistaken notion that you’re saving money.
  • Opening too many cards to gain the benefit of upfront rewards could cost you money if those cards have annual fees. 10 inactive credit cards, each with an annual fee of $95, will cost you $950 per year. That’s a lot of upfront benefits to recover in any one year.

What’s more important, rewards or the regular interest rate?

It really comes down to whether or not you carry a balance on your card. If you don’t, the interest rate doesn’t matter—only the rewards do. But if you normally carry a balance, the interest rate will almost always outweigh the rewards.

Summary

There are scores of credit card issuers, offering hundreds of rewards credit cards. If you’re shopping for a rewards credit card, pick one from this list that best matches your own spending patterns, preferences and credit profile. Most offer not only generous rewards, but also other money-saving benefits, like 0% introductory APR’s.

Whatever card you select, please take our advice to choose a card that pays rewards for spending you would ordinarily do, and make sure you plan to pay off your balance each month. That’ll enable you to get the most benefit from the rewards from any card you choose.

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About David Weliver

David Weliver is the founding editor of Money Under 36. He's a cited authority on personal finance and the unique money issues we face during our first two decades as adults. He lives in Maine with his wife and two children.

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