What is a rewards credit card and how does it work?
Editor's Note
Rewards credit cards allow people to earn rewards when they make purchases with their cards. By using a rewards card for your everyday spending, rewards can quickly add up, helping you get closer to your next vacation or big purchase.
Here, we explain what rewards cards are and how they work.
Related: The best rewards credit cards for each bonus category
What is a rewards credit card?
A rewards credit card "rewards" you with cash back, points or miles when you buy things with your card.
You can then redeem the rewards you've earned for everything from statement credits to travel to gift cards, merchandise and more. Most rewards credit cards fall into two main categories: travel credit cards and cash-back credit cards.
Related: How (and why) you should earn transferable credit card points
How to choose a rewards credit card
Before choosing a rewards credit card, it helps to analyze your spending habits. What do you spend the majority of your money on? This can help you determine what type of rewards card is best for you. For example, do you prefer to earn cash back or travel rewards?
Cash back is straightforward and offers more flexibility, as it can be used for things other than travel. Travel rewards can vary.
Flexible currencies like American Express Membership Rewards points and Chase Ultimate Rewards points can be redeemed for travel through each issuer's travel portals; these points can also be transferred to travel partners.
Cards that earn travel points often let you convert your points to cash back. However, we don't recommend this as the redemption rates for this method are usually poor. For example, Amex Membership Rewards points can be converted into cash back, but at a reduced rate of as little as 0.6 cents per point.
When redeeming, I recommend that you aim for a minimum of 2 cents per point.
Other travel credit cards include cobranded airline and hotel cards. These earn points or miles with a specific airline or hotel. For example, United Airlines credit cards earn United MileagePlus miles, and Hilton cards earn Hilton Honors points.
Lastly, many reward credit cards charge an annual fee. These fees can vary greatly depending on the card, but cards with higher annual fees typically offer more perks and benefits. Always measure the potential rewards and benefits against the annual fee to justify the cost.
Related: Cash back vs. travel rewards: How to choose a credit card
What credit score do I need for a rewards card?
Most travel rewards credit cards require you to have a good credit score of at least 670. It all depends on the card you are applying for. Some premium rewards credit cards may require excellent credit to be approved. There have been cases where people with lower or higher scores got approved or rejected; it depends on your specific scenario.
If your credit card application has been declined and you believe it should have been approved, the card issuer may have a reconsideration line; you can call this line and ask them to reevaluate your application. It is also important to note that some cards have application restrictions that could prevent you from getting approved.
Related: What is a good credit score?
How to maximize card rewards
One way to maximize credit card rewards is to use multiple rewards cards to take advantage of bonus earnings in multiple spending categories.
For example, you could combine the American Express® Gold Card and the Capital One Venture Rewards Credit Card. Use the Amex Gold for dining at restaurants worldwide as it earns 4 points per dollar spent (on up to $50,000 in purchases per calendar year, then 1 point per dollar).
You should also use the card for grocery shopping at U.S. supermarkets as it earns 4 points per dollar, up to $25,000 of spending per calendar year, then 1 point per dollar.
The Capital One Venture Rewards earns at least 2 miles per dollar spent across the board, so you could use this for the remainder of your spending.
There are many ways to combine two or even three rewards credit cards to maximize rewards.
Related: Better together: The ultimate guide to the best credit card combinations
Bottom line
A rewards credit card allows you to earn rewards on almost all of your spending. Remember that the right card should fit your lifestyle, and if there is an annual fee, make sure it's justified. When used properly, the rewards you earn from credit cards can be a great way to kickstart your next trip or save you money.
Related: Best rewards cards
TPG featured card
at American Express's secure site
Terms & restrictions apply. See rates & fees.
| 3X | Earn 3X Miles on Delta purchases. |
| 1X | Earn 1X Miles on all other eligible purchases. |
Pros
- Delta SkyClub access when flying Delta
- Annual companion ticket for travel on Delta (upon renewal)
- Ability to earn MQDs through spending
- Various statement credits for eligible purchases
Cons
- Steep annual fee of $650
- Other Delta cobranded cards offer superior earning categories
- Earn 100,000 Bonus Miles after you spend $6,000 or more in purchases with your new Card within the first 6 months of Card Membership and an additional 25,000 bonus miles after you make an additional $3,000 in purchases on the Card within your first 6 months, starting from the date that your account is opened. Offer Ends 04/01/2026.
- Delta SkyMiles® Reserve American Express Card Members receive 15 Visits per Medallion® Year to the Delta Sky Club® when flying Delta and can unlock an unlimited number of Visits after spending $75,000 in purchases on your Card in a calendar year. Plus, you’ll receive four One-Time Guest Passes each Medallion Year so you can share the experience with family and friends when traveling Delta together.
- Enjoy complimentary access to The Centurion® Lounge in the U.S. and select international locations (as set forth on the Centurion Lounge Website), Sidecar by The Centurion® Lounge in the U.S. (see the Centurion Lounge Website for more information on Sidecar by The Centurion® Lounge availability), and Escape Lounges when flying on a Delta flight booked with the Delta SkyMiles® Reserve American Express Card. § To access Sidecar by The Centurion® Lounge, Card Members must arrive within 90 minutes of their departing flight (including layovers). To access The Centurion® Lounge, Card Members must arrive within 3 hours of their departing flight. Effective July 8, 2026, during a layover, Card Members must arrive within 5 hours of the connecting flight.
- Receive $2,500 Medallion® Qualification Dollars with MQD Headstart each Medallion Qualification Year and earn $1 MQD for each $10 in purchases on your Delta SkyMiles® Reserve American Express Card with MQD Boost to get closer to Status next Medallion Year.
- Enjoy a Companion Certificate on a Delta First, Delta Comfort, or Delta Main round-trip flight to select destinations each year after renewal of your Card. The Companion Certificate requires payment of government-imposed taxes and fees of between $22 and $250 (for itineraries with up to four flight segments). Baggage charges and other restrictions apply. Delta Basic experiences are not eligible for this benefit.
- $240 Resy Credit: When you use your Delta SkyMiles® Reserve American Express Card for eligible purchases with U.S. Resy restaurants, you can earn up to $20 each month in statement credits. Enrollment required.
- $120 Rideshare Credit: Earn up to $10 back in statement credits each month after you use your Delta SkyMiles® Reserve American Express Card to pay for U.S. rideshare purchases with select providers. Enrollment required.
- Delta SkyMiles® Reserve American Express Card Members get 15% off when using miles to book Award Travel on Delta flights through delta.com and the Fly Delta app. Discount not applicable to partner-operated flights or to taxes and fees.
- With your Delta SkyMiles® Reserve American Express Card, receive upgrade priority over others with the same Medallion tier, product and fare experience purchased, and Million Miler milestone when you fly with Delta.
- Earn 3X Miles on Delta purchases and earn 1X Miles on all other eligible purchases.
- No Foreign Transaction Fees. Enjoy international travel without additional fees on purchases made abroad.
- $650 Annual Fee.
- Apply with confidence. Know if you're approved for a Card with no impact to your credit score. If you're approved and you choose to accept this Card, your credit score may be impacted.
- Terms Apply.
- See Rates & Fees