Best rewards credit cards of July 2022

Compare Bankrate’s top rewards credit cards

A closer look at our top-rated rewards credit cards

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

• What we love about the Blue Cash Preferred Card: This is one of the most rewarding cards for groceries—especially if you want consistent, year-round cash back. Sure, you can find other cards that reward you for grocery purchases, but the elevated rates for other everyday expenses like transit, select U.S. streaming services and U.S. gas station purchases make it a well-rounded card for a variety of cardholders’ household budgets—especially considering it’s one of the rare premium cards to offer an intro purchase APR (0 percent for 12 months, then 15.49 percent to 25.49 percent, variable).
• Who this card is good for: Families and households with large grocery and gas station bills. Commuters may also maximize the Blue Cash Preferred thanks to its comprehensive transit category that includes parking, rideshares, tolls, and train tickets.
• Alternatives: This card doesn’t earn boosted rewards at superstores (like Target and Walmart) or wholesale clubs (like Costco or Sam’s Club). Depending on where you like to shop, a flat-rate card like the Wells Fargo Active Cash Card could provide better value. And if the annual fee is a deal-breaker, the Blue Cash Everyday® Card from American Express or the Bank of America® Customized Cash Rewards credit card may be a better fit for households with smaller budgets.

Learn more: How to maximize the Amex Blue Cash Preferred.
Read our Blue Cash Preferred Card from American Express review.

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Chase Sapphire Preferred Card: Best travel card for beginners

• What we love about the Chase Sapphire Preferred Card: Its incredible travel protections and generous rewards rates for both travel and day-to-day purchases seem to clock in above what the Sapphire Preferred’s low annual fee suggests. Plus, its generous sign-up bonus, point value boost toward Chase travel and stellar transfer partners make this card a stand-out option for travelers looking for a low-cost rewards card with great short- and long-term value—especially if you plan to pool your rewards with other Chase rewards cards in the future.
• Who this card is good for: Occasional-to-frequent travelers who want great value without the annual fee of a luxury travel card—especially if they plan on getting more Chase rewards cards in the future.
• Alternatives: The Citi Premier Card could be a worthwhile second choice if you’d rather your bonus categories are weighted toward additional everyday purchases (like gas), but a flat-rate travel card like the Capital One Venture makes it easy to earn boosted miles on purchases that typically fall outside of travel-related bonus categories.

Learn more: Read our experts take on the Chase Sapphire Preferred Card
Read our Chase Sapphire Preferred Card review.

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Wells Fargo Active Cash Card: Best for flat-rate cash rewards

• What we love about the Wells Fargo Active Cash Card: It’s perhaps the first time we’ve seen unlimited 2 percent cash rewards on purchases without additional hoops to jump through to earn the full rewards rate. And unlike a number of other flat-rate cards, it comes with a number of well-rounded features like a solid intro APR, welcome offer and up to $600 cellphone protection per eligible claim (two claims per year, minus a $25 deductible, by paying your cellphone bill with your card).
• Who this card is good for: Cash rewards seekers who prefer a simple, valuable earning structure—especially for big spenders and those with purchases that fall outside typical bonus categories.
• Alternatives: The Citi® Double Cash Card may be a better option if you’re looking for a flat-rate card with an intro APR balance transfer offer. Meanwhile, the Bank of America® Unlimited Cash Rewards credit card (if you’re a Bank of America Preferred Rewards member) or Chase Freedom Unlimited® (due to its additional 3 percent cash back categories) have the potential to be more valuable for some cardholders.

Learn more: Is the Wells Fargo Active Cash worth it?
Read our Wells Fargo Active Cash Card review.

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Discover it Cash Back: Best for rotating category rewards

• What we love about the Discover it Cash Back card: The Discover it Cash Back dials back on bonus features to focus on market-low rates and fees, award-winning customer service and a valuable first-year cash back match welcome offer to supplement its rotating rewards. Plus, the card makes it a lot easier than other rotating category cards to map out the best time to make your purchases since Discover’s cash back calendar is announced the year before rather than a quarter ahead.
• Who this card is good for: People who like the excitement of changing bonus categories and can take advantage of its cycling categories for seasonal expenses.
• Alternatives: Cardholders that don’t mind slightly higher rates and fees or shorter notice on upcoming categories may get more value from the Chase Freedom Flex℠. Although its quarterly categories are harder to anticipate, its year-round 3 percent dining and drugstore categories can help you earn more cash back to lean on if a quarterly category doesn’t align with your usual spending.

Learn more: Is the Discover it Cash Back worth it?
Read our Discover it Cash Back review.

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Citi Custom Cash Card: Best for automatic bonus category

• What we love about the Citi Custom Cash Card: Few rewards cards offer a bonus category that automatically adapts to your spending, and just as few provide the opportunity to earn top-shelf 5 percent cash back on one of 10 categories—including popular picks like grocery stores and restaurants and less common reward opportunities like fitness clubs and live entertainment. Since it earns 5 percent back on the first $500 of your top eligible spending category (then 1 percent back), the Custom Cash is a remarkable partner card to fill your reward gaps.
• Who this card is good for: Rewards seekers who don’t mind juggling multiple credit cards to maximize their earning potential. Since it only earns bonus cash back in one eligible category (up to the first $500 spent per billing cycle) and one percent on all other purchases, it’s a great fit for someone who will only use it on purchases that fall into one eligible category.
• Alternatives: For many cardholders with varied expenses, this card’s structure may mean missing a lot of rewards. Although its categories don’t shift automatically, the Bank of America® Customized Cash Rewards credit card (or the U.S. Bank Cash+® Visa Signature® card, if you prefer the Citi card’s rewards rate) could be a good fit for rewards seekers looking to carry only one credit card in their wallet. It not only lets you choose your own bonus categories from a wide selection, it also lets you earn bonus rewards in multiple categories, giving you more chances to rack up rewards.

Learn more: Citi Custom Cash Card takes cash back to a new high.
Read our Citi Custom Cash Card review.

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Capital One Venture Rewards Credit Card: Best for flexible travel redemption

• What we love about the Capital One Venture card: The flat-rate 2X miles on purchases allows you to earn travel miles without traveling, a great perk for anyone who travels infrequently or spends more on non-travel related expenses. Plus, its flexible redemption portal and ability to redeem rewards for statement credits toward travel purchases already made in the past 90 days go the extra mile toward a streamlined rewards experience many travel cards can’t boast.
• Who this card is good for: People who want to earn a respectable travel mile rewards rate on purchases that aren’t travel-related.
• Alternatives: If you don’t want to pay an annual fee and don’t mind the limited features, the Capital One VentureOne card may be a better deal. But if you’re looking for luxury perks like lounge access and annual credits, the Capital One’s Venture X card’s bonus features can help offset its annual fee easier than you can with the Venture (despite being $395). However, the Chase Sapphire Preferred may offer better rewards value and travel perks than the Venture if you want to stick with a $95 annual fee.

Learn more: Read our experts take on the Capital One Venture Rewards Card.
Read our Capital One Venture Rewards card review.

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American Express Gold Card: Best for travel rewards on dining purchases

• What we love about the American Express Gold Card: When deciding on a dining rewards card, you sometimes have to pick a favorite: eating at restaurants or cooking at home. The ability to earn a great rate on dining AND at U.S. supermarkets is excellent to have rolled into one card. After enriching your rewards with the Gold Card’s stellar Amex travel partners and enough food-related annual credits to nearly offset the $250 annual fee, you’ll have plenty of value left over to take home.
• Who this card is good for: Foodies who want to stockpile travel rewards.
• Alternatives: The Platinum Card from American Express and the Chase Sapphire Reserve are smart picks if you’re itching for more than dining rewards since both offer better travel rewards, perks and protections. On the other hand, the Capital One SavorOne or Chase Sapphire Preferred could be a better fit if you want excellent dining and grocery rewards without a $250+ annual fee.

Learn more: Why the Amex Gold is worth the $250 annual fee.
Read our American Express Gold Card review.

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Capital One SavorOne Cash Rewards Credit Card: Best for dining and entertainment with no annual fee

• What we love about the Capital One SavorOne card: Entertainment rewards are hard to come by, but the most impressive benefit is the SavorOne’s incredible bonus category coverage—especially for frequent diners. Its list of rewards-eligible locations is already broad, but its supporting categories mean you’ll earn 3 percent cash back on dining and entertainment purchases that generally don’t earn rewards, like select streaming services and meals at grocery store food courts, tourist attractions, movie theaters, amusement parks, sporting events and more.
• Who this card is good for: On-the-go foodies and thrill-seekers that want an all-in-one everyday rewards option to feed their next experience.
• Alternatives: If your biggest expenses aren’t limited to food and entertainment but you want a no annual fee card to use for most purchases, then the Chase Freedom Unlimited may be your best bet. Its unique rewards structure offers plenty of chances to earn cash back, thanks to multiple bonus categories and a 1.5 percent flat rate for all other eligible purchases.

Learn more: Capital One SavorOne Cash Rewards Credit Card Benefits Guide.
Read our Capital One SavorOne Cash Rewards card review.

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Capital One Quicksilver Cash Rewards Credit Card: Best for streamlined rewards

• What we love about the Capital One Quicksilver card: The Capital One Quicksilver is a solid choice if you want a no-hassle rewards card with solid protections and decent intro APR offers on purchases and balance transfers. Plus, your rewards maintain their value no matter how you decide to redeem, which isn’t guaranteed even for a cash back card. Cardholders that prioritize a simple, easygoing rewards experience can also choose to have their cash back redeem automatically at a set yearly date or rewards balance threshold.
• Who this card is good for: Anyone who wants solid flat-rate rewards while avoiding the effort of chasing specific bonus categories and enrollment dates—or even using the redemption portal regularly.
• Alternatives: A few flat-rate cards easily outperform the Quicksilver’s 1.5 percent rewards rate, such as the Wells Fargo Active Cash (with its unlimited 2 percent flat-rate cash rewards) and the Chase Freedom Unlimited (offering 3 percent dining and drugstore cash back on top of a flat-rate 1.5 percent).

Learn more: Read our experts take on the Capital One Quicksilver Cash Rewards Credit Card.
Read our Capital One Quicksilver Cash Rewards card review.

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Capital One Venture X Rewards Credit Card: Best for flat-rate travel rewards

• What we love about the Capital One Venture X card: Despite a 2X-mile flat rewards rate that matches the standard Venture card’s—and a much higher $395 fee, its Priority Pass Select membership, annual bonus miles and yearly travel credits alone could offset the annual fee and make the Venture X easier to justify. All these perks and boosted rewards rates for Capital One Travel combine to make it the flagship flat-rate rewards card for moderate and frequent travelers alike.
• Who this card is good for: Travelers who want complimentary lounge access and other benefits that typically come with luxury travel rewards cards without having to spend upwards of $500. Considering how bloated elite travel cards have become with scatter-brained partner perks, the Venture X trims the fat for cardholders just interested in practical travel perks above the $95 annual fee-tier.
• Alternatives: Cardholders that aren’t convinced they’ll be able to take full advantage of the Venture X’s features may have more luck downsizing to a $95 annual fee-tier travel rewards card. The standard Venture card has an equal 2X flat rate that is a good fit for travelers looking for an easy way to earn travel miles, while the Chase Sapphire Preferred lets you rack up points in bonus categories that go beyond travel, which can then be redeemed for a higher value than typically found with travel cards.

Learn more: Is the Capital One Venture X Rewards Credit Card worth it?
Read our Capital One Venture X Rewards card review.

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Capital One VentureOne Rewards Credit Card: Best no annual fee travel card

• What we love about the Capital One VentureOne Rewards card: Earning quality travel rewards like Capital One Miles for no annual fee isn’t a common opportunity. Although you only earn 1.25X miles on purchases other than Capital One Travel hotel and rental car bookings, its intro APR periods and relatively low fees give occasional travelers enough advantages to enjoy a simplified rewards experience. Enterprising travelers can wring even more value out by dipping into Capital One’s great transfer partner program and reduced airport lounge rates.
• Who this card is good for: Beginning travelers and cardholders that want a simple, brass-tacks travel rewards experience at minimal cost.
• Alternatives: Cardholders that are happy sacrificing basic travel perks and transfer partners for a better rewards rate will find the Discover it® Miles card and Bank of America® Travel Rewards credit card promising alternatives. Both have lower rates and fees, plus 1.5X reward rates on all purchases that can be redeemed for travel purchase statement credits with a greater degree of flexibility.

Learn more: Capital One VentureOne Card Benefits Guide.
Read our Capital One VentureOne Rewards card review.

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Citi Premier Card: Best for travel rewards on everyday purchases

• What we love about the Citi Premier Card: It’s a handy catch-all travel card for travelers that spend a bit more time at home and on the road than abroad. Not only does its valuable spread of bonus categories and hotel benefits more than make up for the $95 annual fee, but it also pairs incredibly well with other Citi rewards cards, which will appeal to rewards strategists who want to maximize their earning potential.
• Who this card is good for: Occasional travelers who can rake in more rewards from everyday expenses like food and gas may be the prime Citi Premier cardholders.
• Alternatives: The Chase Sapphire Preferred card’s stronger travel features or the Blue Cash Preferred card’s higher rewards rates may make them better choices for a rewards card with a $95 annual fee, especially if your expenses usually skew toward travel or everyday purchases.

Learn more: Who should get the Citi Premier Card?
Read our Citi Premier Card review.

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The Platinum Card from American Express: Best for luxury travelers

• What we love about The Platinum Card: While being one of the most expensive rewards cards on the market (posing a $695 annual fee), its wealth of travel and shopping protections, assorted credits and airport and hotel perks can offer thousands of dollars in value. If you spend a lot of time jet-setting and can take advantage of many of the card’s features, the Amex Platinum is worth it as one of the best travel cards available.
• Who this card is good for: Luxury-minded travelers who can leverage the card’s deep roster of yearly credits, airport lounge access, shopping perks and airline and hotel privileges.
• Alternatives: Several of the Platinum Card’s perks may be difficult for cardholders to take advantage of, which may make it harder to offset the annual fee since it’s difficult with rewards alone. Travelers may have an easier time justifying the annual fee of the Chase Sapphire Reserve card thanks to its high-value rewards and more practical perks and credits. But casual travelers who care more about the sights than how comfortable their trip is may prefer the Capital One Venture X card.

Learn more: Is the Amex Platinum worth the yearly fee?
Read our Platinum Card from American Express review.

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Chase Sapphire Reserve: Best for frequent travelers

• What we love about the Chase Sapphire Reserve card: Its travel and dining rewards are some of the most valuable we’ve found (along with the rewards rates, if you book through Chase Ultimate Rewards) thanks to its stellar transfer partners and 1.5 percent point value boost when redeemed for travel through the Chase portal. Fortunately, these rewards can go straight into your next trip rather than toward the annual fee, courtesy of the card’s first-class benefits like the $300 annual travel credit (which is more versatile than competitors’), comprehensive travel insurance and airport perks.
• Who this card is good for: Frequent travelers who want to earn rewards on travel and dining.
• Alternatives: The Platinum Card from American Express provides even more annual credits and privileges if you want additional luxury-oriented features like improved airport lounge access. On the other side of the coin, the Chase Sapphire Preferred or Capital One Venture X cards are more cost-effective options that can help you earn more rewards from everyday expenses compared to the Sapphire Reserve’s travel-focused bonus categories.

Learn more: Chase Sapphire Reserve Benefits Guide.
Read our Chase Sapphire Reserve card review.

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Bank of America Premium Rewards credit card: Best Bank of America travel card

• What we love about the Bank of America Premium Rewards card: Bank of America’s Preferred Rewards program can boost your rewards rates by 25 percent to 75 percent, bestowing possibly the best rewards rate for general purchases available. What’s more, infrequent flyers can use their points for cash back without losing value, and the up to $100 in annual airline incidentals credits can make up for the annual fee.
• Who this card is good for: Bank of America account holders with above-average savings account balances—or at least travelers that enjoy in-flight commodities.
• Alternatives: Without at least Platinum Preferred Rewards status, other cards can earn more all-around value for the same annual fee. The Chase Sapphire Preferred or Citi Premier card may be excellent resources instead in this case.

Learn more: Our experts take on the Bank of America Premium Rewards credit card.
Read our Bank of America Premium Rewards card review.

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What is a rewards credit card?

Rewards credit cards accumulate points, miles or cash back for purchases. As the name implies, for every dollar spent, issuers credit your account with rewards. These rewards can be earned at a flat rate—like unlimited 1 percent cash back on all purchases—or offer a higher rate for certain categories, like earning 5 points for every dollar spent on travel-related purchases.

Depending on the issuer, some of the best credit cards for rewards offer distinct rewards programs and have specific rules concerning how you can redeem your rewards. However, understanding the issuer’s credit card rewards program can help you take advantage of all the perks and benefits it offers.

What are the best ways to use reward cards in 2022?

As you navigate the post-pandemic world, your rewards strategy may need to shift with your spending habits to squeeze the most value out of your credit cards.

• If you’re ready to get back to traveling, you may want to consider a travel credit card. But if you’re still apprehensive about traveling or plan to scale back your travel spending, a flexible card that lets you redeem rewards for more than just travel—including for cash back at the same rewards value—may be a great pick. This includes cards like the Bank of America Premium Rewards card and the Discover it® Miles.
• A card that rewards gas purchases or transit may be a good idea if you’re back to commuting to work or school. Then again, if you’re working remotely or on a hybrid schedule, you may not need to rely on a card for commuting as much and may be better off with a flat-rate card that covers a wide variety of everyday expenses. A customizable bonus category card like the Bank of America® Customized Cash Rewards credit card could also be a great fit, as these offer extra versatility by letting you shift your bonus categories to fit your monthly spending habits.
• If you’ve gotten tired of cooking at home, a restaurant rewards card may be more valuable than a credit card that will help you earn rewards on groceries. The Capital One SavorOne strikes a great balance between both categories, but a travel card that rewards dining like the Chase Sapphire Preferred or the Amex Gold may be even more lucrative if you’re eager to pack your bags and travel this summer.

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 of rewards credit cards, along with more detailed recommendations from our team on the best cards in each category.

Cash back cards

With a cash back card, you’ll be rewarded with a percentage of your purchases paid back to you. Cash back works by applying that percentage as a statement credit toward your account, but some cards can directly deposit the cash back into your checking or savings account. Here are the three main types of cash back.

• Flat-rate cash back cards offer a fixed percent back—usually between 1 and 3 percent—on all purchases. For people who prefer to set and forget, a flat-rate credit card is an excellent, no-fuss option. The Capital One Quicksilver Cash Rewards Credit Card, for example, earns 1.5 percent cash back on all purchases.
• Tiered cash back cards reward specific types of purchases at a higher rate. These cards then reward other purchase categories at varying rates until it reaches the base rate for all other purchases. For example, the Blue Cash Preferred earns different cash back percentages in different categories, offering its highest rate with U.S. supermarkets and select U.S. streaming services.
• Dynamic bonus category cards are similar to tiered cash back cards in that they reward certain purchases at a higher rate. The difference is that the bonus categories change. Depending on the card, the issuer may assign new categories quarterly to align with seasonal trends, or you may be able to change the category at your discretion. For example, one of the most popular dynamic bonus category cards is the Discover it Cash Back, which offers 5 percent cash back on purchases in a different category each quarter you enroll (on up to $1,500 in purchases per quarter, then 1 percent). Discover’s Q2 2022 cash back categories cover purchases at gas stations and Target.

Travel rewards cards

With a travel rewards card, you can expect perks like discounted trips, seat upgrades, travel insurance benefits, statement credits and more on top of your rewards. There are two main types of travel rewards credit cards: co-branded and general-purpose. The way you earn and redeem rewards depends on which type you have:

• A co-branded travel card will offer boosted rewards on purchases with a particular airline or hotel. Airline cards typically earn airline miles as rewards, while hotel credit cards usually offer points that can be redeemed for award nights and other perks. Co-branded credit cards are typically less flexible than general-purpose travel cards because in most cases you can only redeem your rewards through the specific airline or hotel associated with your card.
• General-purpose travel cards will only be tied to a card issuer like Chase, rather than a single airline or hotel brand. You’ll earn points on every purchase, which can be redeemed in the issuer’s travel portal for flights, hotel stays and more through a variety of brands. Some cards let you transfer points to a favorite airline or hotel loyalty program. If you’re a brand loyalist, this can often yield the highest rewards value.

Whether your card earns points or miles doesn’t matter much—what’s more important is the value of the rewards you earn. For example, although many co-branded hotel cards carry higher rewards rates or sign-up bonuses on paper than general-purpose travel cards, the points they earn often aren’t as valuable when redeemed. Consider the Marriott Bonvoy program: Marriott points are only worth about 0.8 cents each—less than half the average value of Amex Membership Rewards points (worth up to 2 cents apiece according to The Points Guy).

This potential value range is what gives points and miles a leg up over cash back for some cardholders. While cash back rewards are simply a percentage of your spending, points and miles can offer outsized value based on how you redeem them. For example, while Membership Rewards points are worth just 1 cent per point if you redeem them through American Express Travel, they can be worth up to 2 cents per point if you transfer to the right Amex travel partner. On the other hand, that value can drop to just 0.6 cents per point if you opt for a statement credit redemption. This means you may have to put more effort into planning your redemptions to maximize the value of your rewards. If you’re not keen on the elbow grease involved, or you don’t travel as much and want the option to trade rewards in for travel, cash back and more at a consistent value, then a cash back or general rewards card might be a better choice than a travel card.

Want to learn more? Read our guide to credit card travel rewards.

Business rewards cards

Most small-business credit cards are also rewards cards, falling under the umbrella of cash back or travel rewards. But unlike rewards cards meant for consumers, you’ll need to show proof that you operate a business in order to be approved. Also, the card should only be used for business expenses.

With a business rewards card, you can earn rewards for your most common business expenses—like copier ink, advertising services or flights. For example, with the Ink Business Cash® Credit Card, you can earn 5 percent cash back at office supply stores and on internet, cable and phone services and 2 percent cash back at gas stations and restaurant purchases (on up to the first $25,000 in combined purchases each account anniversary year, then 1 percent).

These cards may offer perks like free employee cards, travel and car rental 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 business credit card.

Want to learn more? Full guide to business credit card rewards.

Pros and cons of rewards credit cards

A rewards card can be a great way to earn lucrative points, miles or cash back for the purchases you’re already making. However, there are some downsides to be aware of before applying. If you’re wondering whether rewards credit cards are worth it, here are a few pros and cons to keep in mind when shopping for your next rewards card:

Who should get a rewards credit card?

The world of rewards credit cards can be confusing to newcomers. If you’re deciding when to take the plunge and acquire a rewards card, aligning your new card with some of your goals is a great way to determine if the card is right for you. Here are a few people who can benefit the most from rewards credit cards:

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  Avid travelers

  If award flights and hotel nights sound like the ultimate rewards to you, consider getting a travel rewards credit card. Whether you already travel often or want to earn points and miles on everyday purchases, there’s a travel card that will put you one step closer to your destination with every eligible transaction. Plus, the best travel credit cards usually offer sign-up bonuses worth several hundred dollars toward travel.

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  Everyday shoppers

  Frugal folks have plenty of options when it comes to high-earning rewards cards. Groceries and gas are two common reward categories that can benefit nearly anyone. And if you want to keep it even simpler, a flat-rate card can ensure you’re earning rewards every time you make a purchase.

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  Foodies

  Those who dine out more often than cooking at home can tap into a wealth of cash back or travel points with a rewards credit card. Whether you prefer an in-person experience, takeout or delivery, there’s a credit card to reward your dining purchases.

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  Small-business owners

  Whether you’re a freelance photographer or you operate a brick-and-mortar store, you can use a business credit card to earn valuable rewards and boost your bottom line. Business credit cards often feature bonus categories tailored to small businesses, such as internet services, office supplies, travel and dining.

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  Responsible credit users

  Most of the best credit cards for rewards require a consumer to have a good-to-excellent credit score, though there are some exceptions. Some rewards credit cards also tend to have higher APRs, which could greatly impact rewards earnings if you carry a balance month-to-month. Therefore, someone with a great credit score that pays their balances in full each month can get a lot of bang for their buck with a rewards card.

Still unsure if a rewards credit card is right for you? Check out our Credit Card Spender Type Tool where you can get personalized credit card recommendations based on your credit score, spending habits and daily needs.

Who should skip a rewards credit card?

A rewards credit card isn’t right for everyone. If you’re trying to rebuild your credit, establish credit or are just trying to stick to your first household budget, using a rewards credit card could do more harm than good.

Using a starter credit card or credit card for bad credit should be your first stop before graduating into the realm of rewards credit cards.

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  Debt managers

  Rewards credit cards are only worth it when you focus your spending on certain categories and keep it under control. Otherwise, you might be tempted to rack up purchases and then find yourself further in debt. If you’re struggling to get rid of your credit card debt, it’s best to skip a rewards card.

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  Credit builders

  Most rewards card require a good credit score to be approved. FICO categorizes a good score starting at 670. If your score is lower than that, focus on a card meant to help you build your credit.

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  New budgeters

  Knowing what you can afford to spend on your card each month is key to keeping your credit card balances in check. If you’re still learning to manage your credit cards and keep your balances low, stick with a low-risk card.

How to choose the best credit card for rewards

When choosing a rewards card, it pays to do some research and reflection. In general, you should ask yourself:

• What types of purchases do you spend the most on? Whether it’s groceries, travel, dining out or something else, it’s important to select a card that fits with your highest spending categories. If your budget isn’t focused on one specific category, consider applying for a flat-rate card that rewards all eligible purchases. If you spend primarily in specific categories, a card that earns higher rewards in specific categories or in rotating categories can help maximize your rewards potential.
• What kind of rewards are you interested in? Deciding between cash back or points and miles ultimately comes down to your personal preference on the type of rewards you want. If you’re a frequent traveler and want to enhance your air travel experience by earning rewards towards flights and hotel room upgrades, a travel credit card that earns points or miles would be a good fit. If you’d rather earn straightforward rewards on everyday purchases, a cash back credit card may be better.
• How much effort are you willing to put into maximizing your earnings? Many cash back rewards cards are relatively low-effort, as they generally earn rewards on everyday purchases without requiring extra effort to maximize your redemption value. In fact, some issuers even allow you to automatically redeem cash back for an easier experience. But if you don’t mind putting a bit of effort into deciding how best to use your rewards, a travel-centric rewards card may be more lucrative, as you can be strategic about how you redeem your points or miles to maximize their value. This may mean booking or redeeming through an issuer’s travel portal, transferring points or miles to a higher-value travel partner with a favorable transfer ratio or taking advantage of limited-time transfer bonuses or promotions. While this effort can easily pay off, it may not be worth the headache for everyone.
• What fees are associated with the card? You’ll need to decide whether a card’s rewards and perks outweigh the cost of its fees. There’s no single right answer, though—it all depends on your personal circumstances and goals. For example, a card that charges a modest annual fee but no foreign transaction fees may actually be a better deal for frequent international travelers than a card that charges no annual fee but comes with a 3 percent foreign transaction fee. However, the most important factor is whether the card’s benefits and the rewards you’ll earn on your spending will justify the annual fee. For instance, the Blue Cash Preferred has a $95 annual fee, but you can make up that cost in cash back by spending around $132 per month at U.S. supermarkets. On the other hand, if you do most of your shopping at a superstores not eligible for more than 1 percent back (like Target or Walmart), the card’s annual fee will be much harder to justify. The same goes for pricier options, like luxury travel cards: Will you use perks like airport lounge access, dining credits or hotel elite status enough to justify hundreds of dollars in fees?
• Which rewards program best fits your spending and offers maximum value? Just as important as deciding how much effort you’ll put into redeeming your rewards, figuring out how a rewards program will complement your goals and spending habits determines whether a cash back, points or miles program is best for you. Although not all cash back programs are as straightforward as a flat-rate card’s, cash back is generally a better fit if you prefer a brass-tacks approach—earning consistent, easy-to-redeem rewards on everyday expenses. Bonus mile reward programs are best if you want to travel and your biggest expenses are in popular categories like travel, dining, hotels, groceries and gas. Meanwhile, point-based rewards programs tend to offer more flexible redemption options for cardholders that may want to redeem for more than just travel (including for cash back, merchandise and more). While bonus points are often worth more toward travel—meaning you may still need to take advantage of certain issuer portal redemption options and transfer travel partners to maximize your rewards’ value (such as for American Express Membership Rewards points)—some point programs (like Chase Ultimate Rewards) provide 1:1 value toward cash back and a bit more value for travel bookings in case you’re not a devout traveler.

Still unsure if a rewards credit card is right for you? Check out our Credit Card Spender Type Tool where you can get personalized credit card recommendations based on your credit score, spending habits and daily needs.

How to calculate the value of credit card rewards points

To find out if a rewards card is worth it for you, you’ll need to do some quick math. The easiest way to calculate the value of your rewards points is to divide the cash value of what you’re redeeming your points for by the number of points required to redeem it. For example if you redeem your points for a plane ticket that would normally cost $700 and you need 70,000 points, your credit card rewards are worth 1 cent apiece.

$700 (cost of ticket) / 70,000 (points needed) = 1 cent (value of reward point)

With some rewards credit cards, the value of your points change based on what you redeem them for. For instance, some points redeemed for cash back are worth less than if you redeemed them for travel.

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:

• Target your spending categories: If your card has special categories that earn higher rewards rates, concentrate your spending in those areas.
• Earn your sign-up bonus: Understand how long you have to meet the spending requirement associated with the offer, but avoid overspending to meet the threshold in time. Then, redeem your bonus through the optimal redemption method (such as transfer partners, the issuer travel portal, etc.).
• Leverage your extra benefits: Be sure you know how and when to cash in statement credits, protections and special access to squeeze the most value out of your card and offset any annual fees, without relying on your rewards earned via spending.
• Double up on cards to earn more: To earn even more rewards, you can combine credit cards that earn rewards for different types of spending. Combining cards that earn bonus rewards in your highest spending categories with a supporting flat-rate rewards card is an excellent way to ensure you earn rewards on all of your key purchases, including those that fall outside of typical credit card bonus categories.
• Redeem through the issuer’s portal: In some cases, redeeming through the issuer’s portal can boost the value of your rewards (such as with Chase Ultimate Rewards cards). This isn’t always the case, however, so be sure to pick the redemption option that offers the most value.]
• Understand merchant category codes (MCCs): These four-digit codes classify where purchases fall into your card’s bonus categories. Knowing your card network’s MCCs allows you to see whether you need to change your shopping habits, which card is better for which expense and how you may be able to snag unexpected rewards.
• Track your spending: If you have a card with rotating or tiered bonus categories, you may need to activate or enroll to earn those rewards each period. Similarly, you’ll want to track your spending and make sure you aren’t spending beyond your card’s rewards cap if another card could be earning more on the extra spending.
• Make sure to offset the annual fee: Look at the value of the rewards you typically earn for your spending to be sure you’re earning enough rewards to more than cover the cost of the annual fee. If your rewards value falls short of the annual fee or barely covers it, you may want to consider downgrading to a no annual fee card that may offer more potential value. On the other hand, you may want to upgrade to annual fee card if you’ll earn more rewards and valuable perks.
• Don’t carry a balance: Carrying a balance leads to interest charges, which can quickly eat through any rewards you’ve earned.

More information on rewards credit cards

For more information on all things rewards cards, continue reading content from our credit card experts:

• Rewards program guides
• Rewards credit card reviews
• How to maximize your new rewards credit card
• 5 crazy ways to get credit card rewards

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