Choosing a rewards credit card can be tough. There are so many different types of cards out there, 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
Choosing a rewards card boils down to four simple steps:
- Choose your rewards: 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, gas, etc.
- 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 a card that earns great travel rewards.
Competitive interest rate
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 around 16 percent.
The 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 months of card membership, or an accelerated earning rate on one or more purchase categories for a limited time.
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 period on purchases and/or balance transfers, often over a year. This allows you to finance large purchases or consolidate credit card debt in a single place without paying interest for a limited time.
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, travel insurance and a car rental damage waiver. Others even offer perks like rideshare credits, access to special events, cell phone protection and much more.
Bankrate’s picks for the top rewards credit cards
Wells Fargo Active Cash® Card: Best flat-rate cash back card
- Rewards: Unlimited 2 percent cash rewards on purchases
- Welcome offer: Earn a $200 cash rewards bonus when you spend $1,000 in purchases in the first three months
- APR: 0 percent intro APR for 15 months from account opening on purchases and qualifying balance transfers from account opening , followed by 16.49 percent, 21.49 percent, or 26.49 percent Variable APR
- Annual fee: $0
For full details, see our in-depth expert review of the Wells Fargo Active Cash Card.
Discover it® Cash Back: Best for high cash back rate
- Rewards: 5 percent cash back on rotating categories each quarter (up to $1,500 in purchases, then 1 percent; activation required); 1 percent cash back on all other purchases
- Welcome offer: Automatic Cashback Match™ only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year.
- APR: 0 percent intro APR for the first 15 months on purchases and balance transfers, followed by 12.74 percent to 23.74 percent variable APR
- Annual fee: $0
For full details, see our in-depth expert review of the Discover it® Cash Back.
Chase Sapphire Preferred® Card: Best for travel
- Rewards: 3X points on dining (including eligible delivery services), select streaming services and online grocery purchases (excluding Walmart, Target and wholesale clubs); 5X points on travel booked through Chase Ultimate Rewards; 5X points on Lyft rides (through March 2025); 2X points on general travel; 1X points on everything else
- Welcome offer: Earn 80,000 bonus points worth up to $1,000 after you spend $4,000 on purchases in the first three months
- APR: 16.24 percent to 23.24 percent variable APR
- Annual fee: $95
For full details, see our in-depth expert review of the Chase Sapphire Preferred Card.
Capital One SavorOne Cash Rewards Credit Card: Best for dining
- Rewards: 3 percent cash back on dining, entertainment, popular streaming services and grocery stores (excluding Walmart and Target); 8 percent cash back on purchases from Vivid Seats (through January 2023); 1 percent back on all other purchases
- Welcome offer: Earn a $200 cash bonus after spending $500 in the first three months
- APR: 0 percent intro APR for 15 months on purchases and balance transfers, followed by 14.99 percent to 24.99 percent variable APR
- Annual fee: $0
For full details, see our in-depth expert review of the Capital One SavorOne Cash Rewards Credit Card.
The bottom line
Choosing the best rewards card for you 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 other perks like travel insurance or a car rental damage waiver. By analyzing your spending habits and your redemption preferences, you can determine which type of reward 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.