Which rewards credit card is best for me?
The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for . The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Terms apply to the offers listed on this page. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.
- When choosing the best rewards card for yourself, consider what type of rewards you want to earn and take a close look at your spending patterns
- It's also important to consider your overall goal for the card – is it to pay off an existing credit card balance while earning cash back rewards or to enjoy heighted points on travel, for example?
- Before you choose, make sure to compare your options side by side and consider cards you can prequalify for
Choosing a rewards credit card can be tough. There are so many types of cards available, all with their own pros and cons. Trying to examine all the features and benefits to reach a decision can seem overwhelmingly complicated.
This guide will walk you through a few simple steps to help manage the decision making process when choosing which type of rewards card is best for you.
How to choose a rewards credit card
There are a handful of things to consider when deciding what kind of rewards credit card you want. You’ll ultimately get the most out of your rewards card if you strategically select a card that will cater to your style of spending. Choosing a rewards card boils down to four simple steps:
- Narrow down what kind of rewards you want to earn. Do you want to keep it simple with cash back or build a stash of points or miles to redeem for travel or other experiences? Learn how different rewards programs work.
- Examine your spending. Use a budgeting app or sit down with pen and paper to figure out how much you spend each month on major categories like dining out, groceries, travel and gas.
- Develop a shortlist and compare cards. Evaluate earning rates and redemption options, interest rates, welcome offers and fees like annual or foreign transaction fees.
- Check if you prequalify. You don’t want to waste time and lower your credit score by applying for cards you’re unlikely to qualify for. Check if you prequalify for your chosen card with Bankrate’s CardMatch tool.
What to look for in a rewards credit card
Now that you know how to choose your next rewards card, let’s look at some of the features you should look for when comparing options.
High earning potential
The main long-term value of a rewards card is its earn rate on purchases. You want to choose the card that offers the highest possible earning potential in the purchase categories you spend the most on. For example, if you spend most of your money on travel, it makes sense to choose from one of the best travel credit cards on the market today for access to top-notch rewards rates. Or, maybe you’re a big-time home cook. In that case, one of the best grocery rewards credit cards will suit you well.
Competitive interest rate
First thing first: It never makes sense to prioritize earning rewards over paying your credit card bill in full. The interest you rack up will almost always be greater than the rewards you earn.
If you pay your bill in full each month, the interest rate is irrelevant, since you won’t be paying any interest. But if you think you may find yourself carrying a balance from one month to the next, it’s important to be aware of your credit card’s regular APR. A good APR for you will depend on your circumstances, but keep in mind that the current average APR is hovering above 20 percent.
A welcome bonus is a sign-up offer designed to encourage new cardholders to apply for a credit card. This may be in the form of a lump sum of cash, points or miles after meeting a spending requirement during the first few months of card membership, or an accelerated earning rate on one or more purchase categories for a limited time. Here are our picks for the best credit card sign-up bonuses.
Fees have the potential to offset any rewards you earn, so it’s important to consider what fees accompany your card, such as an annual fee, foreign transaction fees or late payment fees.
0% intro APR period
Some rewards cards also offer an introductory 0 percent APR on purchases and/or balance transfers, often anywhere from 12 to 21 months. This allows you to finance large purchases or consolidate credit card debt in a single place without paying interest for a limited time. Here are our picks for the best 0 percent interest credit cards.
Extra perks and benefits
Credit card perks can offer a lot of value if you make the most of them. Some cards offer travel benefits like lounge access, a free first checked bag, companion flight tickets or travel insurance. Others even offer under-the-radar perks like rideshare credits, access to special events, cellphone protection, extended warranties and much more.
The bottom line
Choosing the best rewards credit card for yourself is an important decision. The right credit card can help you earn cash back or other rewards on your purchases, save on interest and get access to other perks like travel insurance. By analyzing your spending habits and redemption preferences, you can determine which type of rewards program will work best for you.
Compare cards based on their earning potential, rates, welcome bonus, fees and other features. You’ll be able to choose more easily from a short list of options. Follow these steps, and you’re sure to find a card that is a good fit for your needs.