Are rewards credit cards worth it?

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Most major credit cards offer rewards — but are the rewards you earn significant enough to make applying for the card worthwhile? In most cases, yes. When used responsibly, a rewards credit card can help you save money on everything from travel bookings to Amazon purchases.

However, not everybody knows how to maximize their credit card rewards. And not everybody knows what a good rewards card can do for them. In this guide, we’ll go over the following:

What is a rewards credit card?

A rewards credit card is exactly what it sounds like: a credit card that rewards you when you use the card to make purchases.

There are three basic kinds of credit card rewards: cash back, points and miles.

Cash back

Cash back cards are the most straightforward type of rewards card because they use a currency you’re already familiar with: dollars. You earn a percentage of every qualifying purchase back. For example, 3 percent cash back on a $100 purchase would earn you $3 in rewards.

Some credit cards offer the same percentage purchases, like the Wells Fargo Active Cash℠ Card, which offers 2 percent cash rewards on purchases. These cards are useful for people with varied spending habits and those who plan to use one credit card for everything.

Other cash back cards reward cardholders with higher cash back percentages when they spend in certain categories, and a lower rate for general purchases. The Blue Cash Preferred® Card from American Express, for example, offers 6 percent cash back on U.S. supermarket purchases (for up to $6,000 in purchases per year, then 1 percent) as well as 6 percent back on select U.S. streaming subscriptions, 3 percent cash back on transit, 3 percent back on U.S. gas station purchases and 1 percent back on all other purchases.

Points and miles

Point-based rewards cards and miles-based credit cards work similarly. Instead of earning dollars on every purchase, you earn either points or miles. Like cash back, you usually earn points or miles on your purchases at a set rate — one point per dollar spent, for example — and many point- and mile-based rewards cards increase your rate when you spend in certain categories.

The Capital One Venture Rewards Credit Card, for example, is a flat-rate points card that offers 2 miles per dollar spent on every purchase.

The Chase Sapphire Preferred® Card, on the other hand, offers 5 points per dollar on travel purchased through Chase Ultimate Rewards®, 3 points per dollar on dining, 2 points per dollar on general travel purchases and 1 point per dollar on all other purchases. Plus, cardholders can earn 5 points per dollar on Lyft rides through March 2022.

Not sure where you stand in the cash back vs. points and miles debate? Points and miles cards can occasionally be more complicated than cash back cards because you’re dealing with a different currency. That means you have to do a little math to determine the dollar value of your points or miles. However, points and miles cards usually offer redemption options that allow you to squeeze more value out of your rewards.

How do credit card rewards work?

The rewards you earn with your credit card can be redeemed for money-saving opportunities, including:

  • Travel bookings: Save money on flights and hotels or earn enough rewards for a free flight.
  • Statement credits: Reduce the amount of money you owe on your credit card.
  • Online shopping credits: Reduce the amount you pay at checkout when you shop with popular online retailers.

You can also redeem your credit card rewards for gift cards, charitable donations and — in some cases — paper checks.

How to maximize your credit card rewards

If you want to maximize your credit card rewards, here are a few strategies that can help you get the most out of each purchase.

  • Use a combination of rewards cards. Pick a bonus category rewards card that offers a high percentage of cash back or points/miles on the purchases you make most often. Make sure you also have a flat-rate card. Use the bonus category card when making purchases that earn higher-level rewards and use the flat-rate rewards card on all other purchases.
  • Take advantage of credit card sign-up bonuses. These offer significant rewards — often worth hundreds of dollars — if you spend a certain amount on purchases within a specific time frame.
  • Understand which rewards redemption options are the most valuable. If you have a travel credit card, for example, your rewards are often worth more when you use them to book travel through your credit card issuer’s online booking portal.
  • Understand which rewards redemption options are the least valuable. Exchanging your rewards for gift cards is generally a lower-value option, compared to travel purchases, statement credits or online shopping credits.
  • Consider a combination of cards that use the same redemption system (Chase Ultimate Rewards, American Express Membership Rewards, Citi ThankYou Points). This way, you can combine the rewards you earn on multiple credit cards and use them for bigger purchases or redemption options.

The pros and cons of rewards credit cards

Is a rewards credit card worth it? It all depends on whether you’re able to use your rewards credit card responsibly — and that includes taking advantage of all of the rewards you earn. Here are some of the biggest credit card rewards benefits and drawbacks:


  • Earn cash back, points or miles on every purchase
  • Redeem those rewards for money-saving opportunities like travel bookings, statement credits and online shopping credits
  • Maximize your credit card rewards by choosing cards that offer bonus cash back, points or miles in the shopping categories where you spend the most money


  • May be tempted to spend more than you can afford in order to max out your rewards or sign-up bonuses
  • Must redeem your rewards to save money
  • Some redemption options give you less value for your rewards

Should you get a rewards credit card?

If you’re going to get a credit card — which is a smart move, since getting a credit card can help you build good credit to receive better terms on other financial products like mortgages — it’s a good idea to apply for a rewards credit card.

Why? Because when it comes down to the choice between a credit card that offers rewards and a credit card that doesn’t, choosing a credit card that doesn’t offer rewards is like leaving money on the table.

Yes, some non-rewards credit cards have their advantages. The Citi® Diamond Preferred® Card, for example, doesn’t offer rewards on purchases, but it does offer 0 percent intro APR on purchases for 12 months from account opening and 21 months on balance transfers (followed by 13.74 percent to 23.74 percent variable APR thereafter). If you want to use a balance transfer credit card to pay off debt, the Citi Diamond Preferred might be a good option.

Likewise, most secured credit cards don’t offer rewards, but they can be excellent tools to help you rebuild your credit.

It’s worth applying for a rewards credit card whenever possible. But with so many options, choosing a rewards card can be tricky. Start with our list of the best rewards credit cards, or consider one of these top picks:

Wells Fargo Active Cash℠: Best for flat-rate cash back

  • Unlimited 2 percent cash rewards on purchases
  • $200 cash rewards bonus after spending $1,000 on purchases within the first three months
  • $0 annual fee
  • 0 percent intro APR for 15 months on purchases from account opening, then 14.99 percent to 24.99 percent variable APR

Blue Cash Preferred® Card from American Express: Best for everyday family purchases

  • Earn a $300 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months.
  • 6 percent cash back on U.S. supermarket purchases (up to $6,000 in purchases per year, then 1 percent); 6 percent back on select U.S. streaming subscriptions; 3 percent cash back on transit; 3 percent back on U.S. gas station purchases; 1 percent back on all other purchases
  • $0 introductory annual fee for the first year, then $95
  • 0 percent intro APR for 12 months on purchases, then 13.99 percent to 23.99 percent variable APR

Capital One Venture Rewards Credit Card: Best for travel rewards on everyday purchases

  • 2 miles per dollar on all purchases
  • One-time bonus of 60,000 miles after spending $3,000 in purchases within the first three months
  • $95 annual fee
  • 15.99 percent to 23.99 percent variable APR

Discover it® Cash Back: Best for rotating cash back rewards

  • 5 percent cash back after activation on rotating categories each quarter (up to $1,500 in purchases, then 1 percent), 1 percent for all other purchases
  • Automatic Cashback Match for the first year
  • $0 annual fee
  • 0 percent intro APR for 14 months on purchases and balance transfers, then 11.99 percent to 22.99 percent variable APR

The bottom line

Are credit card rewards worth it? In most cases, yes. Though credit card rewards have their pros and cons, applying for a credit card that offers rewards is generally better than applying for a card that doesn’t. Why? Because if you aren’t earning rewards on every purchase you make, you’re losing the opportunity to redeem those rewards for travel bookings, statement credits and more.