The best rewards credit cards for 2021
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The rewards available from credit cards go well beyond just points and miles. With the right credit card, you can save on shopping, get a jump-start on your vacation fund and more. With TPG’s top rewards credit cards, you can add value, along with points and miles, to your wallet.
There are dozens of rewards credit cards to choose from, but I’ve narrowed them down to this list of the best rewards credit cards available right now. Some of these are travel rewards cards that earn transferable points currencies, some are cash-back cards and a couple are cards that earn rewards for a specific loyalty program.
Of course, travel rewards may not be high on everyone’s priority list right now. Social distancing and preventing the spread of the coronavirus has kept many of us from being able or willing to travel, which means you may be considering options outside of our best travel credit cards. Some of these rewards cards can help you save money now with cash back or non-travel redemption options — and others can help you build up a future travel fund that can be used on an incredible travel redemption once coronavirus concerns subside.
Best rewards credit cards
- American Express® Gold Card: Best for U.S. supermarkets and takeout
- Capital One Venture Rewards Credit Card: Best for airline rewards
- Citi® Double Cash Card: Best for no annual fee
- Chase Sapphire Preferred Card: Best for beginner travelers
- Chase Sapphire Reserve: Best for frequent travelers
- Ink Business Preferred Credit Card: Best for small businesses
- Blue Cash Preferred® Card from American Express: Best for select U.S. streaming services
- Chase Freedom Flex: Best for rotating rewards
- Wells Fargo Propel American Express® card: Best for gas rewards
- Capital One Savor Cash Rewards Credit Card: Best for entertainment rewards
- Chase Freedom Unlimited: Best for flexible rewards
- Blue Cash Everyday® Card from American Express: Best for beginner cash back
Comparing the best rewards credit cards
|Rewards credit card||Best For||Bonus value*||Earning rate||Annual fee|
|American Express Gold Card||Supermarkets and takeout||$700||Earn 4x on restaurants worldwide and U.S. supermarkets (up to $25,000 per calendar year, then 1x), 3x on flights booked directly with airlines or through amextravel.com, 1x on everything else. Terms apply.||$250
(see rates & fees)
|Capital One Venture Rewards Credit Card||Airline rewards||$840||2x miles on purchases||$95|
|Citi® Double Cash Card||No annual fee||N/A||Earn 2% cash back on every purchase — 1% when you buy and 1% when you pay your bill||$0|
|Chase Sapphire Preferred Card||Beginner travelers||$1,200||Earn 2x points total on up to $1,000 in grocery store purchases per month from Nov. 1, 2020 to April 30, 2021, 2x on dining and travel, 1x on everything else||$95|
|Chase Sapphire Reserve||Frequent travelers||$1,000||Earn 10x on Lyft, 3x on travel (after using the $300 travel credit) and dining, 1x on everything else.||$550|
|Ink Business Preferred||Small businesses||$2,000||Earn 3x on assorted business categories (up to $150,000 per account year in combined spending; then 1x).||$95|
|Blue Cash Preferred Card from American Express||Streaming services||$250||Earn 6% at U.S. supermarkets (up to $6,000 per year) and select U.S. streaming services, 3% on transit and U.S. gas stations, 1% on everything else. Terms apply.||$95 (see rates & fees)|
|Chase Freedom Flex||Rotating rewards||$200||Earn 5% cash back on purchases up to $1,500 spent on quarterly rotating categories (activation required), 5% on travel booked through the Ultimate Rewards Portal, 3% on dining and drugstores, and 1% on everything else.||$0|
|Wells Fargo Propel American Express® card||Gas rewards||$300||Earn 3x on dining (eating out and ordering in), gas stations, transit, travel and select streaming services, 1x on everything else.||$0|
|Capital One Savor Cash Rewards Credit Card||Entertainment rewards||$300||Earn 4% on dining and entertainment, 2% at grocery stores, 1% on everything else||$95|
|Chase Freedom Unlimited||Flexible rewards||$200||Earn 5% on travel booked through the Ultimate Rewards Portal, 3% on dining and drugstores, and 1.5% on everything else.|
|Blue Cash Everyday® Card from American Express||Beginner cash back||Up to $300||Earn 3% back on the first $6,000 spent at U.S. supermarkets (then 1%), 2% at U.S. gas stations and department stores, 1% on everything else||$0 (see rates and fees)|
*Bonus value is an estimated value calculated by TPG and not the card issuer.
The information for the Wells Fargo Propel and the Capital One Savor has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
TPG’s picks for the best rewards credit cards
American Express Gold Card: Best for supermarkets and takeout
Welcome offer: Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new card within the first six months, although you may be targeted for up to 75,000 bonus points through the CardMatch tool (offer subject to change at any time).
Rewards rate: Earn 4x at restaurants worldwide and U.S. supermarkets (on the first $25,000 spent each calendar year, then 1x); 3x on flights booked directly through airlines or on amextravel.com; 1x on all other purchases.
Annual fee: $250 (see rates and fees)
Who should apply: With the Amex Gold, you’re getting a great 8% return on restaurant and U.S. supermarket spending and a solid 6% return on airfare. The Amex Gold is a nice middle ground between the top-tier The Platinum Card® from American Express and a lower-value beginner card, such as The Amex EveryDay® Credit Card from American Express. The information for the Amex EveryDay card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
You’re getting perks, such as a dining credit of up to $120 each calendar year, plus a rewards structure that focuses on common spending categories besides just travel — all without the massive $550 annual fee (see rates and fees) that comes with the Amex Platinum card. If you want an Amex card that makes it easy to earn Membership Rewards on everyday expenses such as dining and groceries at U.S. supermarkets, this is definitely a card to consider.
Check out the full card review for the Amex Gold.
Capital One Venture Rewards Credit Card: Best for airline rewards
Sign-up bonus: Earn 60,000 bonus miles after you spend $3,000 on purchases within the first three months of account opening.
Rewards rate: 2x miles on every purchase.
Annual fee: $95
Who should apply: The Venture has long been a crowd favorite for travel rewards because of its simplicity. You know you’re getting 2x on every purchase, which takes a lot of the guessing game out of earning rewards. The miles earned can then be used as a statement credit to “pay” for eligible travel (and temporarily some non-travel) purchases or they can be transferred to one of Capital One’s 13 airline and two hotel transfer partners. As an added perk, you’ll also get a statement credit of up to $100 every four years for your Global Entry or TSA PreCheck application fee, which isn’t a benefit commonly found on low-fee cards.
Also, Capital One added a temporary perk: Venture and Savor cardholders will now earn an unlimited 5x/5%, respectively, on Uber Eats purchases. The good news is that this promotion will run through the end of January 2021 — with no caps on how many miles you can earn.
This card is often marketed as a beginner card, but anyone can take advantage of the card’s rewards structure and benefits. Beginners will enjoy the simplicity of using the Venture, while experts can use it for non-bonus spending. All of this landed the Venture a spot on our TPG list of best credit cards — and a special place in The Points Guy Brian Kelly’s wallet.
Check out the full card review for the Capital One Venture.
Citi® Double Cash Card: Best for everyday spending
Sign-up bonus: N/A
Rewards rate: 2% on every purchase — 1% when you buy and 1% when you pay your bill
Annual fee: $0
Who should apply: Two percent cash back on every purchase is a great offer for non-bonus spending. Although Citi did strip important purchase protections from this card in 2019, the issuer also added the ability to convert your Double Cash rewards to ThankYou points via a linked ThankYou account. ThankYou points are valued at 1.7 cents each at TPG, in part because of Citi’s solid list of transfer partners. The ability to convert points means you’re getting a 3.4% return on every purchase for no annual fee. If you’re in the market for a simple card that earns flexible rewards, then the Citi Double Cash is the best with no annual fee.
Check out the full card review for the Citi Double Cash.
Chase Sapphire Preferred: Best for beginner travelers
Sign-up bonus: 60,000 bonus points after you spend $4,000 on purchases in the first three months.
Rewards rate: Earn 2x points total on up to $1,000 in grocery store purchases per month from Nov. 1, 2020 to April 30, 2021, 2x on dining and travel, 1x on everything else
Annual fee: $95
Who should apply: The Chase Sapphire Preferred is one of the best beginner travel cards available. You’re getting an excellent sign-up bonus worth $1,200, according to TPG valuations. Its rewards structure is simple, but broad enough to earn points on a large number of purchases.
The points currency you’re earning is among the highest-value transferable currencies out there. You can redeem points for 1.25 cents each through the Chase Ultimate Rewards portal or you can transfer points to one of Chase’s airline and hotel partners. Plus, you’re only paying a $95 annual fee.
Check out the full card review for the Chase Sapphire Preferred.
Chase Sapphire Reserve: Best for frequent travelers
Sign-up bonus: 50,000 points after you spend $4,000 on purchases in the first three months of account opening
Rewards rate: Earn 10x points on Lyft; 3x points on travel (after using $300 travel credit) and dining; 1x on everything else
Annual fee: $550
Who should apply: The Chase Sapphire Reserve card is one of the top premium travel cards available. Although changes to the card unveiled in January 2020 were met with mixed reactions, this card remains a favorite among many TPGers. You’re earning Chase Ultimate Rewards points on a wide range of travel and dining purchases (because Chase defines both categories quite broadly), while also getting access to luxury perks such as an annual $300 travel credit, Priority Pass lounge access, TSA PreCheck/Global Entry application fee credit and a $60 annual DoorDash credit for 2021.
You’ll get at least one year of DashPass membership through DoorDash, a Lyft Pink membership and an impressive array of travel protections. The Chase Sapphire Reserve also just dropped a few new perks to help maximize benefits during the pandemic.
When it comes time to redeem your rewards, you can transfer points at a 1:1 ratio to any of Chase’s 10 airline and three hotel transfer partners, or you can redeem them for certain travel (and now also non-travel) purchases at 1.5 cents each. If you’re a regular traveler who can take advantage of all of the card’s perks, this is an excellent rewards card to have in your wallet.
Check out the Chase Sapphire Reserve Review.
Ink Business Preferred Credit Card: Best for small businesses
Sign-up bonus: 100,000 points after you spend $15,000 on purchases in the first three months of account opening
Rewards rate: Earn 3x on the first $150,000 spent in combined purchases on travel, shipping purchases, Internet, cable and phone services and on advertising purchases made with social media sites and search engines each account anniversary year.
Annual fee: $95
Who should apply: The Ink Business Preferred is one of the best all-around business credit cards on the market. You’ll earn 100,000 Ultimate Rewards points when you spend $15,000 in the first three months. TPG values Ultimate Rewards points at 2 cents each, which puts this bonus at $2,000 in value when you maximize Chase’s transfer partners. Or you can redeem points through the Chase Travel portal for 1.25 cents each, giving you $1,250 in value.
The Ink Business Preferred offers 3x (a 6% return) across a wide range of business expenses, giving business owners ample opportunities to earn rewards. Plus, you’ll also get access to some solid benefits, including travel protections and cell phone insurance.
Check out the full card review for the Ink Business Preferred.
Blue Cash Preferred® Card from American Express: Best for commuters
Welcome offer: A $250 statement credit after you spend $1,000 in purchases on your new card within the first three months of account opening.
Rewards rate: Earn 6% cash back at U.S. supermarkets (on up to $6,000 in purchases per calendar year; then 1%) and select U.S. streaming services; 3% on transit and at U.S. gas stations; 1% on everything else.
Annual fee: $95 (see rates and fees)
Who should apply: The Blue Cash Preferred got a much-needed facelift in 2019, adding valuable bonus categories to keep up with changing consumer habits. With a new streaming service being launched every other day, earning 6% on streaming is a great bonus category that only a few cards recognize.
This card is also a commuter’s dream, with unlimited 3% cash back on gas and transit (including taxis, ride-shares, tolls, trains, buses and more). Although the card does not earn Membership Rewards points, it remains a simple way to earn rewards on common everyday spending categories.
Check out the full card review for the Blue Cash Preferred.
Chase Freedom Flex: Best for rotating rewards
Sign-up bonus: $200 after you spend $500 on purchases in the first three months of account opening
Rewards rate: Earn 5% cash back on the first $1,500 in purchases spent on quarterly rotating categories (activation required); 5% on travel booked through the Ultimate Rewards portal; 3% on dining and drugstores; 1% on everything else.
Annual fee: $0
Who should apply: If you’re willing to keep up with spending categories that change every three months, you can get a lot out of a rewards card such as the Chase Freedom Flex. The categories are often easy to maximize. For example, the first-quarter 2021 categories are wholesale clubs; internet, cable and phone services; and select streaming services. If you maximize the bonus categories each quarter, you’ll earn $300 in bonus category rewards each year. This new card also comes with cell phone protection.
You can also pair this card with one of the Chase credit cards that earn Chase Ultimate Rewards and earn valuable Chase points rather than just cash back. With TPG’s valuation of Chase points at 2 cents each, you’ll be earning up to 10% back on bonus category spending.
Check out more details on the Chase Freedom Flex.
Wells Fargo Propel American Express card: Best for gas rewards
Sign-up bonus: 20,000 points after you spend $1,000 on purchases in the first three months of account opening
Rewards rate: Earn 3x on dining (eating out and ordering in), gas stations, transit, travel and popular streaming services; 1x on everything else
Annual fee: $0
Who should apply: The Wells Fargo Propel offers a low-cost way to earn fixed-value points on everyday spending categories. Earning 3x on such a wide array of categories is unique for a no-annual-fee card, making this a great option for beginners in the rewards game. If you also have the Wells Fargo Visa Signature® card (another no-annual-fee card), your points could be worth 1.5 cents each. Although this isn’t a great rewards card for travel experts because of its lack of transfer partners, beginners can get a lot out of the Propel.
The information for the Wells Fargo Visa Signature has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Check out the full card review for Wells Fargo Propel.
Capital One Savor Card: Best for entertainment rewards
Sign-up bonus: $300 after you spend $3,000 on purchases in the first three months
Rewards rate: Earn 4% cash back on dining and entertainment; 2% cash back at grocery stores; 1% on all other purchases.
Annual fee: $95
Who should apply: Anyone who spends a lot on dining and entertainment should consider this card. Capital One defines both of those categories broadly, meaning you’ll earn 4% back for sit-down restaurants, take-out, coffee shops and bakeries, concert tickets, movies, sporting events and even tourist attractions.
This is a great tiered earning structure for rewards-card beginners because you don’t have to pay attention to changing categories. Plus, it offers excellent value for veterans of the rewards game. With no foreign transaction fees, this is the perfect card to use on entertainment purchases, both at home and when traveling. Keep in mind that the Savor will also earn an unlimited 5% on Uber Eats through Jan. 31, 2021.
Check out the full card review for the Capital One Savor.
Chase Freedom Unlimited: Best for flexible rewards
Sign-up bonus: $200 after you spend $500 on purchases in the first three months.
Rewards rate: Earn 5% on travel booked through the Ultimate Rewards portal; 3% on dining and drugstores; unlimited 1.5% cash back on all other purchases.
Annual fee: $0
Who should apply: Everyone needs a card that earns rewards on those purchases that don’t fall under any other bonus categories. That’s where a card like the Chase Freedom Unlimited shines — especially for existing Chase Ultimate Rewards cardholders.
If you also have the Chase Sapphire Preferred, Chase Sapphire Reserve or Ink Business Preferred Credit Card, you can transfer your cash back rewards from the Chase Freedom Unlimited to your Ultimate Rewards account. You can then redeem those points at an elevated rate through the Chase portal or transfer them to travel partners. TPG values Ultimate Rewards points at 2 cents each, which doubles the value of your rewards.
Check out the full card review for the Chase Freedom Unlimited.
Blue Cash Everyday® Card from American Express: Best for beginner cash back
Welcome offer: Earn up to $300 cash back: Earn 20% back on eligible purchases at Amazon.com on the card in the first six months, up to $200 back. Plus, earn $100 back after you spend $1,000 in purchases on your new card within the first six months of account opening.
Rewards rate: Earn 3% back on the first $6,000 spent at U.S. supermarkets per calendar year (then 1%), 2% at U.S. gas stations and select U.S. department stores, 1% on everything else
Annual fee: $0 (see rates and fees)
Who should apply: If you’re looking for a no-annual-fee credit card to start your cash back earning with, the Amex Blue Cash Everyday is a potential option for you. You’ll be earning a solid 3% back on U.S. supermarkets, as well as 2% on gas and department store purchases. While supermarkets and gas stations aren’t uncommon categories, department stores is a rare bonus category to find on rewards credit cards. Having a card that earns 2% at select U.S. department stores such as Macy’s could be a game changer for shoppers.
Cardholders also get 0% intro APR on purchases for 15 months from the account opening date (see rates and fees) (carriable APR of 13.99% to 23.99% based on your creditworthiness and other factors after — see rates and fees). If you’re looking for a way to finance an upcoming large purchase, 15 months without interest is one way to spread out your payments. Just make sure you’re able to pay off the balance by the time the intro APR period ends.
Check out the full card review for the Blue Cash Everyday Card.
When choosing our top rewards cards, I looked at multiple factors — with sign-up bonuses/welcome offers, rewards rates, and annual fees topping the list. I also assessed each rewards card’s flexibility, the type of rewards each card earned, the simplicity of the redemption process, and any perks that come with each card.
These are my top picks, but that doesn’t mean every card on this list is the perfect choice for everyone. At the end of the day, the cards that fill your wallet should allow you to earn more than 1% or 1x points on every purchase you make. Hopefully, this guide will help take care of the bulk of researching and comparing your card options, but make sure you’re choosing a card that will work for you in both the short and long term.
How rewards credit cards work
Rewards credit cards offer cardholders redeemable rewards on everyday purchases as an incentive for using the card. These rewards differ from issuer to issuer and even card to card. Some earn cash back while others offer points or miles that can be redeemed for travel. At TPG, we are partial to travel credit cards that offer additional perks and benefits to enhance our travel experiences. There are also incredible rewards structures available on top cash-back cards.
In fact, based on results from a TPG survey commissioned last year in 2020, the number one goal of most cardholders when they choose a credit card is earning cash back.
Typically, top rewards credit cards charge an annual fee as the tradeoff for the rewards, perks and other benefits cardholders receive. However, cardholders who take advantage of what their cards have to offer in rewards or other benefits will find it easy to offset the cost of any annual fee.
How to maximize credit card rewards
Pay it all off
Rule number one, pay your card off in full and on time. Getting into bad habits with overspending and accruing interest will write off any cash back or points that you have earned. If you’re unable to do this, don’t take out the card.
Do the math
Look back through your finances over the last year or more to make sure you can afford the annual fee and see if your spending will earn it back in cash back or rewards.
Earn the sign-up bonus
Sign-up bonuses can be up to six figures and are key to maximizing your points and miles game. If you’re regular monthly spending won’t be enough to hit the threshold, then don’t get the card. Spending more than you can afford just to hit a sign up bonus should be avoided.
Use it however and wherever
Pay with it at the supermarket. Pay with it at dinner with family or friends. Better still, if your friends or family are paying cash or don’t use points and miles cards, why not suggest paying for the whole check and have them leave you cash or Venmo you their share. Some cards will even allow you to pay your rent and utility bills, and even some insurances with it so it’s always worth checking out, especially if no convenience fees would be charged.
Make it a habit to check your credit card or airline shopping portals before each and every purchase that you make online. That way you’ll be sure to never miss out on those extra bonus points and miles.
Make the most of every benefit
From comprehensive travel insurance to hotel room upgrades, most cards have a ton of benefits just waiting for you to use. Make sure you know everything that your card has to offer so you don’t miss out on a single benefit.
Consider several cards
Having more than one reward credit card will boost your earning potential across the board. For example, taking out an airline cobranded card like the Delta SkyMiles® Platinum American Express Card, as well as a cash back card like the Capital One Savor Cash Rewards Credit Card will have you reaping both airline and travel benefits while getting cash back on your dining and take out.
Best ways to use reward cards in 2021
Now that 2020 is behind us, we can look forward to travel hopefully returning to some extent by the end of 2021. Until then, there are many ways you can still make the most of your rewards credit cards and add to your pot of points and miles at the same time.
While travel is still largely off the cards, we’re staying home and eating at home more than ever. For example, the Wells Fargo Propel American Express card which offers 3x on ordering in as well as gas stations and streaming services. These are great examples of things we’ll still need to spend money on even while we’re continuing to stay at home more than ever before.
You’ll likely be spending more on groceries as we eat out less due to restaurant closures. This is great news if you have the American Express Gold Card which earns 4x on groceries (up to a maximum spend of $25,000) or the Chase Freedom Flex and Unlimited cards which earn 5% cash back on your supermarket grocery purchases.
These are all great ways of continuing to earn points and miles that will be ready to use on incredible redemptions when travel returns in all its glory.
Pros and cons of rewards credit cards
While rewards credit cards are an excellent tool to help you save money and hit financial goals, they aren’t a great fit for everyone.
- You’ll earn rewards on expenses you make every day. If you’re going to spend that money anyway, why not earn rewards while you’re at it?
- They can help you hit financial goals. Whether you want to pad your savings or travel more luxuriously on a budget, rewards credit cards can help you do so when used responsibly.
- Rewards credit cards can offer peace of mind. Many cards come with travel protections or purchase protections covering worst-case-scenarios while abroad or shopping for large-ticket items.
- Rewards credit cards have higher APRs than other types of credit cards. If you aren’t paying off your bills in full each month, the interest you’ll rack up will actually end up costing you money — even if you’re earning rewards.
- They aren’t accessible to everyone. Credit card issuers are choosy when it comes to approving rewards credit cards, which means you typically have to have good credit to get one. Those who are new to building credit or who have a less-than-stellar score may not be able to get the best rewards credit cards.
Related: What is a good credit score?
What credit score do I need to get a rewards credit card?
There is no specific one-rule-fits all regarding credit score requirements. Each rewards card has its own specific requirement but issuers usually look to accept those who have good-high credit scores (670+).
For example, if you’re considering one of the most premium cards like the Chase Sapphire Reserve or The Platinum Card® from American Express you’ll need an excellent credit score of around 760 or more. That’s because these cards come with the most luxury perks and benefits.
If you have low credit, not all is lost. Even if your score is lower than 700, there are cards out there that will consider you like The Chase Freedom Unlimited or The Amex EveryDay® Credit Card from American Express.
Types of credit card rewards
All of these cards earn some type of rewards, but the kind of rewards differs from card to card:
Transferable points — These are the issuers’ currencies that can be transferred to certain partners to maximize value. For example, several Chase cards earn Ultimate Rewards points, which can be redeemed for several different things through the Chase Ultimate Rewards portal but can also be transferred to one of Chase’s partners, including United or Marriott. Generally speaking, this type of rewards card is the most valuable because of its redemption flexibility.
Cash back — This is the most straightforward type of reward. You’re earning a percentage of each purchase that you can redeem for cash at a later date. Although cash back is always redeemed at a fixed value, it can be highly useful for both beginners and seasoned travelers. Points and miles are best redeemed for airfare or hotel bookings, but cash back has more flexibility without compromising its value. You can use cash back to save up for the day-to-day expenses of your travel or you can simply use it to save money on your statements each month.
Hybrid — Hybrid cards have popped up in recent years. These cards earn cash back on their own but can be paired with other cards to convert that cash to more valuable points currencies. A prime example of this type of card is the Chase Freedom Unlimited. You’re earning cash back on purchases, but those rewards can be converted to Ultimate Rewards points when you pair the Unlimited with another eligible Chase card. The Citi Double Cash also recently joined the ranks of hybrid cash-back cards with no annual fee.
Loyalty program — These are cards that earn points or miles for a specific loyalty program, typically for an airline or hotel. Most of the time, these cards also come with brand-specific benefits like complimentary elite status (for hotel cards) or priority boarding (for airline cards). These currencies aren’t as flexible as transferable currencies but they can still be highly valuable.
Cash-back rewards credit cards explained
You might think of rewards credit cards and automatically assume that only means travel and airmiles rewards. Wrong. If you’re not so frequent a traveller, or have cut back on your travels amid the pandemic, cash back rewards cards might be better for you.
Cash-back credit cards reward you for every dollar you spend and will typically give you anything from 1% to 6% back on your purchases. That works out at between 1 and 6 cents per dollar, which at first, might not seem a lot. However, if you’re getting that return on everything you spend, those cents can quickly turn into 10s, 100s and even 1000s of dollars.
In rare cases, you’ll find much higher cash back rates offered for certain purchases, like the Amex Blue Cash Everyday card, which offers 20% back on eligible purchases at Amazon.com, over the first six months of card membership up to a total of $200 cash back.
There are three different variations of cash back cards including; flat-rate, tiered and rotating.
Let me explain.
Cash back cards offering a flat rate simply means that the same cash back percentage is earned on all types of purchases. The best example of this type of card from our list of “Best reward credit cards” is the Citi Double Cash Card which earns a flat rate of 2% on all purchases (1% when you buy, plus 1% as you pay).
Cards with tiered earning offer different percentage earning rates for specific spending categories. The highest earning category of each card would likely best suit a consumer whose spending habits match said category.
For example, the Blue Cash Preferred Card from American Express offers a 6% cash back on the first $6,000 in purchases at U.S. supermarkets each calendar year; then 1%, whereas as the Capital One Savor Cash Rewards Credit Card focuses more on leisure spending, with its offer of 4% cash back on dining and entertainment. The information for the Capital One Savor card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Rotated earning means that cards will either have preset quarterly spending categories which earn a higher percentage for a given time period, or, in some cases, the card owner is able to choose which category they would like the higher earning percentage to apply to. These bonuses are usually ‘opt in’ or need to be activated and the bonus rate is likely to be capped.
For example, the Chase Freedom Flex earns up to 5% cash back on quarterly rotating categories, on up to $1,500 in purchases each quarter you activate.
Travel rewards credit cards explained
Travel rewards cards don’t just mean airmiles. They bring a whole host of travel perks into your life that you’ll wonder how you previously lived without like lounge access, seat upgrades, comprehensive travel insurance, statement credits and more.
Similar to cash back cards, there are also different types of travel rewards cards which offer slightly different benefits.
Cobranded travel cards
The purpose of these cards is increased rewards on purchases with specific airlines or hotel brands. The cards are less flexible than general purpose travel cards as the points earned are specific to the airline or hotel and are only redeemable with the same hotel chain or airline and sometimes within airline alliances. One example of this is Southwest, who offer a number of credit cards which would suit different travelers depending on their needs.
General purpose travel cards
These cards earn points linked to a specific bank or issuer like Chase or American Express. The points earned are then transferable to a selection of airlines, hotel, car hire and other brands depending on the partnerships of each bank or issuer. If you’re loyal to one specific airline or hotel, it’s worth researching the transfer partners of cards before applying. This gives the ultimate freedom when deciding how you’d like to redeem your points, as your points don’t already belong to an airline or hotel brand.
Popular credit card rewards programs
There are more than a dozen credit card rewards programs out there, from airline and hotel loyalty programs to issuer programs. Each month, TPG publishes our monthly rewards valuations that outline how much each point or mile currency is worth in our eyes, but each program has its advantages and disadvantages. The three largest (and most valuable) issuer rewards programs offer flexible points, a wide range of credit card options to earn points and a solid list of transfer partners.
Chase Ultimate Rewards is one of the top rewards programs for a good reason. TPG values points at 2 cents each, and you can redeem points through Chase’s portal (with a redemption bonus depending on which Chase cards you hold) and transfer points to partners like United and Hyatt.
Top cards that earn Ultimate Rewards:
- Chase Sapphire Reserve – full card review
- Chase Sapphire Preferred – full card review
- Ink Business Preferred – full card review
The other top rewards program is Amex Membership Rewards, where points are also valued at 2 cents each. Amex has the most extensive network of airline and hotel transfer partners — 22 — of the top issuer programs, and you can often find transfer bonuses. Of course, you can also redeem points through Amex’s travel portal.
Top cards that earn Membership Rewards:
- The Platinum Card® from American Express – full card review
- American Express® Gold Card – full card review
- The Business Platinum Card® from American Express – full card review
Citi ThankYou Points aren’t quite as valuable in the eyes of TPG (we value the points at 1.7 cents each), but there is still a lot to like about this program. There are some great transfer partners available through Citi ThankYou Points, including Avianca LifeMiles, Etihad Guest and Virgin Atlantic. Just keep in mind that Citi stripped most of its travel and purchase protections across its cards in 2019, which devalues this program slightly.
Top cards that earn ThankYou Points:
- Citi Prestige® Card – full card review
- Citi Premier® Card – full card review
- Citi Rewards+® Card – full card review
The information for the Citi Prestige card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
How TPG values Amex, Chase and Citi rewards points
At TPG, we publish our own point valuations that evaluate the cash value of each reward currency. These valuations are updated regularly and based on a wide range of factors (such as the average value you can get from a point, how flexible the redemption options are and more) to give our readers a picture of how much dollar value you’ll get on average from a specific rewards currency. Here is a quick breakdown of the current TPG valuations of each of the points currencies (not including cash-back rewards cards) included on our list of top rewards credit cards.
|Point currency:||TPG valuation*:|
|Amex Membership Rewards||2 cents|
|Capital One Venture Miles||1.4 cents|
|Chase Ultimate Rewards||2 cents|
|Citi ThankYou Points||1.7 cents|
|Wells Fargo GoFar Rewards||1.5 cents|
*TPG valuations are calculated by TPG and are not reviewed by the card issuer.
How to choose a rewards credit card
There’s no right and wrong answer for what is the ‘best’ credit card. Options should be considered on a case-by-case basis depending on each individual’s unique circumstances.
You should be looking at the rewards rate, annual fee and benefits to decide which cards will give you the most long-term value. From there, you can choose which card within those parameters offers the best welcome bonus to strategize which card is best for you to apply for right now.
Here are some important factors we feel are most important to consider when you’re doing your research.
Rewards cards aren’t for everyone
Before taking out a credit card, the most important thing to consider is your credit. In most cases, only those with credit scores of 690 or above will have application accepted for credit cards.
This is not a hard and fast rule, however, as there are a few options for those considered to have bad credit.
Once you’ve figured that out, you should consider if you’ll be able to limit your spending on the card so that you are able to pay it off in full each month. If so, then a rewards credit card makes sense.
If not, the interest accrued is likely to write off any value you’ll have earned in points or rewards from the card. In this case you might be better off considering a low-interest, or a balance-transfer credit card instead that has a 0% interest period so you don’t get swamped with debt.
What do you spend your money on?
This is a really important factor to consider as cards will often have higher earning points earning or cash back potential with specific categories of spending. There are cards for those who spend lots on groceries, others that are geared towards those who travel often and also some for those who love to wine, dine and entertain themselves. If you fall into the latter category, then the Capital One Savor would cater to that.
Goals for your rewards?
What type of rewards would make the most sense to you? If you could do with some extra cash each month, then a cash-back credit card is likely to be your best bet.
Or, if you travel often with the same airline and want to raise your airmiles earning game, then a cobranded airline credit card that earns bonus rewards and offers perks for those flights would be best for you.
How much can you save with a rewards credit card?
Rewards credit cards have the potential to open up a lot of earning opportunities when you pick the right card for your specific spending habits. According to the Bureau of Labor Statistics, the average U.S. household spent $4,643 on groceries, $3,526 on dining, $2,094 on gas and $3,050 on entertainment in 2019. Using those figures, let’s compare how much you could earn with three popular rewards credit cards:
|Card||Chase Sapphire Preferred||Capital One Venture||Blue Cash Preferred|
|Groceries||4,643 Ultimate Rewards points||9,286 Capital One miles||$278.58 cash back|
|Dining||7,052 Ultimate Rewards points||7,052 Capital One miles||$70.52 cash back|
|Gas||2,094 Ultimate Rewards points||4,188 Capital One miles||$62.82 cash back|
|Entertainment||3,050 Ultimate Rewards points||6,100 Capital One miles||$30.50 cash back|
|Total earning||16,839 Ultimate Rewards points ($336.78 in value)||26,626 Capital One miles ($372.76 in value)||$442.42 cash back|
Regardless which card you choose from that list, the earning potential is solid — especially since all three cards charge only $95 in annual fees. And this doesn’t include any earnings you could get from travel expenses (which the Bureau of Labor Statistics doesn’t have as a definitive expense category. You could earn even more once you factor in those purchases, as well as any miscellaneous spending that fit into other bonus categories (such as transit, which earns 3% on the Blue Cash Preferred).
Bottom line? Rewards credit cards are well worth the annual fees that come with them when you utilize bonus categories and avoid interest payments by paying your bill in full each month.
Additional reporting by Daniel Ross
Featured image by Getty Images
For rates and fees of the Amex Gold Card, please click here.
For rates and fees of the Amex Platinum Card, please click here.
For rates and fees of the Blue Cash Preferred, please click here.
For rates and fees of the Blue Cash Everyday, click here.
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