Editorial disclosure: All reviews are prepared by Bankrate.com staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including card rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the bank’s website for the most current information.
Author: Barry Bridges | bbridges@bankrate.com
How to choose and use a rewards credit card
With a rewards credit card, you can unlock value from the spending you do every day. Whether you’re looking to earn rewards on travel, shopping, dining out, filling up at the pump or a more specific purchase, there’s a rewards credit card that can help you do it.
Bankrate’s picks for 2020’s best rewards credit cards
A closer look at our top-rated rewards credit cards
Capital One® Venture® Rewards Credit Card
What sets it apart
You’ll earn 2X miles per $1 on all purchases along with a 50,000 mile welcome bonus after you spend $3,000 in the first 3 months. You’ll also enjoy having the freedom to transfer miles to more than a dozen travel loyalty programs, which makes the Capital One Venture even more useful and valuable.
Why it might not be for you
Look elsewhere if you can’t bear to travel without airport lounge access, a major perk offered by competitors including Chase, American Express and Mastercard.
Our final thought
The Capital One Venture is an exceptional rewards card with plenty of perks for the frequent traveler.
Read the full review and apply on Capital One’s secure website.
Capital One® Quicksilver® Cash Rewards Credit Card
What sets it apart
Unlike some other flat-rate rewards cards, the Capital One Quicksilver doesn’t have an annual fee, a foreign transaction fee or complicated mechanisms that control how you earn your rewards.
Why it might not be for you
If the calendar influences your spending habits (big purchases during home improvement season, for example), you could earn more rewards with a bonus category card.
Our final thought
If you want a low-maintenance cash back card that makes earning rewards simple, the Capital One Quicksilver is well worth your consideration.
Read the full review and apply on Capital One’s secure website.
Discover it® Cash Back
What sets it apart
Discover Cashback Match™ automatically matches the cash back you’ve earned at the end of your first year. If you target your spending effectively in the rotating bonus categories, your earnings can add up quickly.
Why it might not be for you
The bonus categories process does require some effort on your part. If you forget to enroll every quarter or adjust your spending patterns, the 5% bonus on spending (up to the $1,500 quarterly maximum) becomes a missed opportunity.
Our final thought
The Discover it Cash Back is a desirable no annual fee rewards card, due in large part to its first-year bonus offer. If you take full advantage of the 5% bonus categories, the following years won’t be too shabby either.
Read the full review and apply on Discover’s secure website.
Capital One® VentureOne® Rewards Credit Card
What sets it apart
An annual fee is sometimes the price you have to pay for generous travel rewards and benefits, but not in the case of the Capital One VentureOne. The rewards rate of 1.25x miles on every purchase might not be that exciting but the broad travel category definition and flexible redemption options sweeten the deal. Perks including 24-Hour Travel Assistance Services give the card’s value a nice boost.
Why it might not be for you
If you plan on using your miles to pay for travel booked outside of the Capital One website, the mileage credits have to be redeemed within 90 days of making your travel purchase.
Our final thought
You’d have to travel far and wide to find a rewards card that offers this kind of earning potential without charging an annual fee. The CapitalOne VentureOne is a solid choice among travel rewards cards.
Read the full review and apply on Capital One’s secure website.
Chase Freedom Unlimited®
What sets it apart
Very few rewards cards make cash back this easy. You can just sit back and earn 1.5% cash back with every eligible purchase — no rotating categories or minimum requirement for redeeming cash back.
Why it might not be for you
A number of cards offer higher rewards rates. If you want a rewards rate with a larger scale on certain purchases, consider a card with rotating bonus categories.
Our final thought
The Chase Freedom Unlimited card is a great option for your first rewards card because it requires very little effort on your part to earn cash back and redemptions are easy. Overall, this card is a great no-hassle option with a lot of flexibility, all for no annual fee.
Read the full review and apply on Chase’s secure website.
Capital One® Savor® Cash Rewards Credit Card
What sets it apart
The 4% rewards rate on dining and entertainment makes the Capital One Savor a compelling choice for people who enjoy food and fun. Don’t mistake it for a two-trick pony, though, as it also offers 2% at grocery stores and 1% on everything else.
Why it might not be for you
If you prefer your kitchen and den to the restaurant and multiplex, consider an alternative like the Blue Cash Preferred® Card from American Express. Its highlights include 6% cash back at U.S. supermarkets on up to $6,000 in purchases per year (1% thereafter) and 6% cash back on select U.S. streaming services.
Our final thought
If you’re frequently out on the town, you’ll find a lot of reasons to put the Savor Cash Rewards card in your wallet. Few cards offer this level of rewards for dining and entertainment.
Read the full review and apply on Capital One’s secure website.
Chase Sapphire Preferred® Card
What sets it apart
The points you earn with your Chase Sapphire Preferred receive a 25% bump in value when you redeem for airfare, hotels, car rentals and cruises through the Ultimate Rewards portal, and you also get the benefit of a 1-1 point transfer with travel partners (nine airlines and four hotel brands). Some rewards portals can be on the restrictive side, but Chase Ultimate Rewards offers a refreshing contrast.
Why it might not be for you
The $95 annual fee, although reasonable, puts some pressure on the cardholder to maximize points value to offset the cost.
Our final thought
The combination of the Chase Sapphire Preferred and the Chase Ultimate Rewards portal can bring lucrative travel rewards even for the casual traveler.
Read the full review and apply on Chase’s secure website.
Blue Cash Everyday® Card from American Express
What sets it apart
You won’t find many cards that can earn this much cash back in family-friendly spending categories year-round, especially with no annual fee. The U.S. supermarkets category does have an annual spending limit before the cash back rate drops (3 percent to 1 percent), but that $6,000 cap still leaves plenty of room for substantial earnings.
Why it might not be for you
If you don’t devote a large chunk of your spending to this card’s family-oriented categories, you would probably see more benefit from a rewards card geared toward a different consumer profile.
Our final thought
With the Blue Cash Everyday Card, American Express offers the opportunity to earn exceptional cash back rewards without having to pay an annual fee. Budget-conscious families, take note.
Read the full review and apply on the American Express secure website.
Rewards cards: What they are and how they work
A rewards card can earn you points, miles or cash back for purchases made with the card. The card can be flat-rate — meaning it offers the same percentage back for every purchase — or offer rotating bonus categories — meaning you’ll earn different percentages depending on the category in which your purchase falls.
Depending on the issuer, rewards cards offer distinct rewards programs and have specific rules concerning how you can redeem your rewards. Some issuers require you to redeem your rewards through the portal. There can also be restrictions on what you can redeem your rewards for, such as cash back, statement credit, gift cards, shopping, travel and more.
In some cases, redeeming through the portal adds value to your rewards. A prime example is using the Chase Ultimate Rewards® portal with the Chase Sapphire Preferred. When you use the portal to redeem points earned with this card for airfare, hotels, car rentals and cruises, the value increases 25%.
If you redeem 60,000 points for travel purchases through Chase Ultimate Rewards, those points will be worth $750 instead of $600.
Types of rewards credit cards
Navigating all the rewards card options available to you can be difficult. That’s why we broke out some of the most common types, along with more detailed recommendations from our team on the best cards in each category.
With a cash back rewards card, you’ll earn a percentage of cash back on purchases. Your cash back will typically be applied as a statement credit toward your account, yet some cards can directly deposit the cash back into your checking or savings account.
Whether it’s a co-branded card with an airline or hotel or a general-purpose travel rewards card, these cards can help frequent travelers earn rewards for their travel-related spending.
With a travel rewards card, you can expect perks like discounted trips, seat upgrades, travel insurance benefits, statement credits and more. For example, the Capital One Venture Rewards Credit Card offers up to $100 Global Entry or TSA PreCheck® credit. Read our guide to your first travel rewards card for tips on how to choose the right travel card option for you.
Co-branded retail cards
Certain co-branded cards are issued through a partnership between a credit card company and a retailer. With co-branded retail cards, you can earn discounts, free shipping and members-only access events.
The Costco Anywhere Visa® Card by Citi, for example, will earn you 4% cash back on eligible gas (up to $7,000 per year, then 1%), 3% on restaurant and eligible travel purchases and 2% on all other purchases from Costco and Costco.com. You’ll earn 1% on all other purchases.
With a business rewards card, you can earn rewards for any business-related spending. The Capital One® Spark® Cash for Business, for example, will earn you an unlimited 2% cash back on every purchase for your business.
These cards may offer perks like free employee cards, travel and auto insurance, travel statement credits and more. If you’re interested in applying for a business credit card, read our tips on how to choose the right card.
“I have [a lot of] credit cards and use each of them for specific reasons: free nights, free flights, upgraded hotel rooms, cash back, etc. Overall, though, the goal is to strategically earn rewards, perks, and cash back to allow my family of four to travel as much as we want for as little money as possible.”
— Lee Huffman, Travel & Lifestyle Writer at Bald Thoughts
A generous sign-up bonus, sometimes called a welcome offer, is one of the marks of a premier rewards credit card. Here’s a look at some of the most lucrative sign-up bonuses and welcome offers from our top rewards credit cards:
| |
Offer/bonus
|
Spending requirement |
Value
|
| Chase Sapphire Preferred Card |
60,000 bonus points
|
Spend $4,000 on purchases in the first 3 months from account opening |
$750 (toward travel when you redeem through Chase Ultimate Rewards)
|
| Capital One Venture Rewards Credit Card |
50,000 miles
|
Spend $3,000 on purchases within 3 months from account opening |
$700*
|
| Capital One Savor Cash Rewards Credit Card |
$300
|
Spend $3,000 on purchases within 3 months from account opening |
$300
|
*Estimate based on December 2019 valuations by The Points Guy (50,000 miles x .014)
How to judge the value of a sign-up bonus
Not all bonuses are created equal, and sometimes you need to dig deeper into the numbers to figure out how much they’re worth. Follow these tips to get a clearer picture:
- Calculate the value of points/miles — When the value of a bonus isn’t spelled out, resources like The Points Guy’s monthly valuations can come in handy. As The Points Guy explains: “These valuations are based on a combination of what I would pay to buy points if given the opportunity and the overall value I could get from redeeming them, factoring in variables like award availability, fees and change/cancellation policies.”
- Look at the proportions — An overly large spending requirement could reduce the value of a bonus. For example, a $300 bonus after spending $2,000 in 3 months could make more sense economically than a $500 bonus that requires spending twice as much in the same amount of time.
- Avoid getting overextended — Spending more than you normally would just to meet the bonus requirement could come back to haunt you. If your bonus quest results in carrying a big balance, APR charges could negate the benefits of the welcome offer.
Redeeming your credit card rewards
A stash of rewards is only meaningful if you redeem them. Thankfully, many cards offer unlimited redemption and rewards that don’t expire, but it’s still important to consider all the ways rewards can be used prior to applying for a card.
- Redemption options — Before redeeming, you should know what your particular card allows you to redeem for. Options generally include statement credit, cash back, gift cards, shopping, travel and charitable donations. If you plan on redeeming for travel, familiarize yourself with your particular card’s rules beforehand.
- Rewards portals — Some rewards credit cards allow you to transfer your rewards to partner hotels and airlines, but more commonly, cards will require that travel be redeemed through their portal. Make sure to research which cards require this prior to applying, especially if you value flexibility.
- Transferring rewards — If you’re interested in transferring your rewards from your card to an airline or hotel’s loyalty program, some cards allow you to do so and often for increased value. For example, many Chase cards allow you to transfer Chase Ultimate Rewards points to other travel loyalty programs at a 1:1 value.
How to maximize your rewards
Developing a thorough credit card strategy doesn’t happen overnight. Here are a few ways you can maximize your rewards at every stage of your ownership.
Determine what your goals are
Before you apply for a card, decide what your goals are for using it. Would you like to do more traveling? Are you interested in saving money on everyday expenses like groceries and gas? Do you want to upgrade your airline or hotel status?
When you establish your long-term goals for your card use, you can then go on to develop a well-coordinated credit card strategy.
Take a look at your spending habits
The rewards card you choose should have a rewards structure centered around what you spend the most on. For example, if you manage a busy family of five, a rewards card that offers a high percentage of cash back on gas and groceries may be a good fit.
Should you already have one or more rewards cards, look for another that accomplishes a new goal or covers a segment of your budget not already accounted for.
Max out your spending categories
To get the most bang for your buck, you’re going to want to max out your card’s spending categories each quarter, should they have them. Cards with unlimited earning potential are an exception.
For example, if you owned the Discover it® Cash Back and spent $1,500 every three months on the 5% cash back rotating category, you’d have successfully maxed out the category at the 5% rewards rate (1% thereafter, activation required).
Double up on cards to earn more
To earn even more rewards, you can pair rewards cards that earn rewards for different types of spending.
Our most important piece of advice when it comes to pairing cards is to start slowly. Applying for multiple cards at once will only hurt your credit score — instead, start with the one that has the widest rewards net and slowly move onto others with more limited rewards categories.
If you’re interested in learning more about pairing cards, read our guide to the best credit card combinations.
Survey points to millions of dollars in expired rewards
Nearly half of travel loyalty program members have unintentionally forfeited valuable rewards by letting airline and hotel rewards expire, according to a recent survey.
The same survey also found that more than one-quarter of people who collect credit card rewards have let those rewards expire, as well.
In other words, thousands of Americans are leaving a lot of money on the table by failing to use the rewards they earn from travel loyalty programs and credit card rewards programs.
“A lot of people are sitting on airline, hotel and credit card rewards that are worth a significant amount of money,” said Bankrate.com credit card analyst Ted Rossman. “That’s why it’s so important to take advantage of them before they expire. If you need more time to save up for your desired redemption and your rewards are about to expire, reset the clock by demonstrating new account activity. This can involve a small purchase or redeeming a minimal number of points or miles.”
The Bankrate survey found that 46 percent of U.S. adults who participate in airline and hotel rewards programs have let their points or miles expire at some point. Additionally, 29 percent of credit card users who collect card rewards have let them expire.
Divides and disconnects
The Bankrate survey offers a statistical breakdown of how many consumers have let their rewards expire, by demographic:
|
Hotel points |
Airline miles |
Credit card rewards |
| AGE GROUP |
|
|
|
| Millennials (23-38) |
57% |
50% |
44% |
| Generation X (39-54) |
40% |
46% |
26% |
| Baby boomers (55-73) |
42% |
46% |
19% |
|
|
|
|
| GENDER |
|
|
|
| Male |
47% |
45% |
29% |
| Female |
44% |
48% |
29% |
|
|
|
|
| REGION |
|
|
|
| Northeast |
45% |
53% |
36% |
| Midwest |
42% |
41% |
23% |
| South |
50% |
49% |
29% |
| West |
44% |
42% |
29% |
|
|
|
|
| ANNUAL INCOME |
|
|
|
| Under $40K |
57% |
48% |
31% |
| $40K-$80K |
43% |
43% |
33% |
| Over $80K |
43% |
48% |
26% |
Conclusions from analyzing the survey results include the following:
- Age group: People from younger generations are generally more likely to lose their rewards to expiration than their older counterparts.
- Gender: Men and women seem equally likely to let their points, miles or rewards expire.
- Region: The region where consumers are most likely to let their points, miles or rewards expire is the Northeast. Consumers in the Midwest are the least likely to let them expire, followed in order by the West and the South.
- Annual income: Among income groups, consumers making under $40K a year are the most likely to let their points, miles or rewards expire. Consumers in the other two groups, $40K-$80K a year and over $80K a year, seem equally likely to let them expire.
In addition, the survey revealed a disconnect between the perceived value and the actual value of loyalty and credit card rewards, as well as a lack of awareness about the amount of rewards earned.
Among loyalty program participants, only 25 percent were able to list how many hotel points they have and 29 percent knew their frequent flyer mile total. Just 33 percent knew their credit card rewards balance.
More than half of the people surveyed (53 percent) admitted that they didn’t know how much 10,000 rewards points/miles are worth. Generally, 10,000 points/miles are worth $100 to $199.
More education and diligence are needed
The survey results point to a few more conclusions about the issue of expired rewards and how to address it:
- Untold millions of dollars in rewards are going to waste because they’re allowed to expire.
- Consumers need to do a better job of monitoring their rewards by regularly checking the “dashboards” on their account portals or their written statements. (You can learn more from Bankrate about how to put your rewards to use before they expire.)
- Consumers need more education about the potential value of their rewards and how to redeem them for maximum value.
Survey methodology
Bankrate commissioned YouGov Plc to conduct the survey. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,558 adults. Fieldwork was undertaken between September 25-27, 2019. The survey was carried out online. The figures have been weighted and are representative of all US adults (aged 18+). It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.
If you’re new to rewards cards, it’s easy to assume that accumulating points is always as simple as just using your card.
However, racking up enough rewards for free travel or substantial cash back can be more complicated than it might seem. Checking out the fine print can help you avoid disappointing detours on your way to earning substantial rewards.
Bonus spending categories
The advantage of a rewards card’s rotating category bonuses is that they are usually the highest bonuses you can get, but there may be limits and loopholes. Here are a few to consider:
- Spending definitions — Let’s say you have a rewards card that offers a bonus rate on grocery purchases. Some cards don’t include merchants such as Walmart or Target in their definition of grocery stores. Another example is gasoline purchases. If you buy gas at Costco, for example, remember that some bonus categories specify purchases at gas stations, not wholesale clubs.
- Earning caps — Many cards put a limit on how much you can earn in a specific period of time. With the Chase Freedom and Discover it Cash Back, for instance, bonus earnings apply to just the first $1,500 spent each quarter.
- Alternate payment methods — Third-party food apps, online gift cards and mobile wallet payment methods such as Apple Pay or Google Pay might not always count toward bonus spending.
Non-automatic perks
Some card benefits are automatically available when you sign up and use the card, such as earning cash back or getting consumer purchase protections, such as extended warranties. In other cases, you must be proactive. You’ll need to sign up or enroll.
Whether it’s elite status with a hotel or rental car chain, baggage fee credits for when you fly or concierge services, read your card’s fine print carefully to find out what you need to do to enroll. Usually it’s as easy as a one-time or yearly online registration.
Special redemption options
Once you’re comfortable with your credit card’s rewards program, you may be able to find some advanced strategies. One way to do that is to analyze your redemption options.
For example, points from the Chase Sapphire Preferred card are worth 1 cent each when redeemed for statement credits. But Chase offers cardholders 25 percent more value when they redeem for airfare, hotels, car rentals and cruises through the Chase Ultimate Rewards travel portal, boosting the point value to 1.25 cents.
Also, consider how your brand loyalty and affiliations could ramp up your points. Some banks reward card users for also having a checking account or retirement account with them.
Avoid costly assumptions
There’s a learning curve when it comes to getting the most out of your credit card rewards programs, especially when you make assumptions.
Foreign transaction fees
If you’re more of a domestic traveler, you might not be too concerned if your chosen rewards cards tack on fees of 3% or more for overseas purchases. However, what most people don’t realize is that online purchases from overseas merchants can incur foreign transaction fees.
Changes to rewards programs
Terms are subject to change at virtually any time. Make it a habit to skim your entire credit card statement (either online in PDF form, or the physical copy that arrives via mail) and any communication directly from the issuer to spot any upcoming program changes. You might come to realize that you’re not getting as much value from a card as you once did if it decides to drop or reduce a certain offer, for example.
“The main thing we look for [in a rewards credit card] is the rate at which the miles are accumulated and which spending habits the card will work best for. Since we rarely eat out having a card pay 2x points on restaurants is not beneficial to us compared to a card with 1.5x points on everyday purchases.”
— Brittany and Kelan Kline, Co-Founders at The Savvy Couple
How we chose the list of top rewards credit cards
The selection is based on research by a team of Bankrate writers and editors with years of personal finance experience. Only the ones you see on this page made the cut, based on factors including:
- Rewards value — After all, the whole point of this type of credit card is to earn rewards. The cards on our list represent some of the U.S. market’s finest credit card rewards programs.
- Overall value — Apart from cash back, points or miles, does the card offer a good deal? Do the benefits outweigh any fees or restrictions? The answer to both questions had to be an emphatic “yes” for the card to make our list.
- Service — The cards we’ve chosen represent several credit card issuers rated among the highest for customer satisfaction, including Discover, Chase and Capital One.
Additional reading on rewards cards
For more information on all-things rewards cards, continue reading content from our credit card experts:
Senior Editor Barry Bridges has been writing about credit cards, personal loans, mortgages and other personal finance products since 2017. Before joining Bankrate, he was an award-winning newspaper journalist in his native North Carolina. Send your questions about credit cards (and fantasy baseball) to bbridges@bankrate.com.
Have more questions for our credit cards editors? Feel free to send us an email, find us on Facebook, or Tweet us @Bankrate.
