Why “choose your own rewards” cards are a great option in 2021
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I don’t know about you, but I have no idea how the rest of this year will pan out. Will I start traveling more in the fall? Will I continue to spend most of my budget on groceries and streaming? Will something unexpected happen that completely turns my spending on its head again?
I don’t have any of the answers to these questions — which means planning out my earning strategy is a bit more complicated this year than normal.
If you’re like me, you may be wondering which cards you can add to your wallet to help you adapt to changing spending habits. The answer? “Choose your own rewards” credit cards.
There are some cards out there that offer customizable rewards structures, either automatically adapting to your changing spending habits each month or allowing you to change your rewards manually at certain intervals. And in a world where spending habits are constantly changing these days, those types of cards are more valuable than ever.
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Personalization is a valuable benefit
One of the areas I hope the credit card industry continues to explore more of moving forward is personalization. I’m a strong believer that there is no such thing as the “best” credit card — everyone has different needs and circumstances, and there isn’t a single credit card that is the best option for everyone.
But in that same vein, finding a card or a group of cards that fit your specific spending needs can be a struggle. This is where a card that allows personalization can come in handy. Rather than being stuck with a one-size-fits-all approach to a rewards structure, you can pick the category mix that works the best for you.
Cards that adapt to your habits long-term
This level of personalization isn’t just useful when you first get the card. Because these “choose your own rewards” cards generally allow you to change your categories — either on a monthly or quarterly basis — you can rest assured that your card’s reward structure will adapt as your spending habits do.
During a time when no one is 100% sure what next month will bring in terms of travel, health expenses and other spending, knowing your card can flex as needed to continue providing value even if your top spending categories change over time is incredibly valuable.
For example, my top spending categories right now are groceries and dining. But by September 2021, my top categories might be travel and gas stations. And by December, it could change to drugstores and groceries again. A card that lets me switch up my rewards structure can provide long-term value that not every card offers.
Best “choose your own rewards” cards
Sign-up bonus: Earn $150 in rewards after you spend $500 in the first 90 days from account opening.
Annual fee: $0
Rewards structure: Earn 5% back on your first $2,000 in combined eligible purchases each quarter on two categories of your choosing, earn 2% back on one everyday spending category of your choosing and 1% back on everything else.
This card has the largest list of potential categories to choose from all the cards on this list. Each quarter, you can choose two new 5% categories from the following:
- TV, internet and streaming services
- Home utilities
- Ground transportation
- Select clothing stores
- Cell phone providers
- Electronic stores
- Gyms/fitness centers
- Fast food
- Sporting goods stores
- Department stores
- Furniture stores
- Movie theaters
Additionally, you’ll choose your 2% category: gas stations, restaurants and grocery stores. That’s almost 200 potential rewards combinations to choose from, making this one of the most personalizable cards out there.
And what’s even better is that many of these categories aren’t easily found with other cards. While your 5% rewards are limited to $2,000 in spending each quarter, that’s still a solid $400 in rewards each year — not including the uncapped 2% rewards category or any non-bonus spending.
Related: U.S. Bank Cash+ card review
Sign-up bonus: Earn $200 online cash rewards bonus after you spend $1,000 in purchases in the first 90 days from account opening
Annual fee: $0
Rewards structure: Earn 3% cash back in the category of your choice each month, 2% on groceries and wholesale clubs (on up to $2,500 in combined 3% and 2% bonus spending each quarter) and 1% on all other purchases.
The Bank of America Cash Rewards allows you to choose from the following 3% categories:
- Online shopping
- Drug stores
- Home improvement/furnishings
The online shopping category is comprehensive and easy to maximize — and it’s not a common bonus category for mainstream credit cards. Another great thing about the Bank of America Cash Rewards card is that you can switch your 3% category each month. So if you have spending habits that shift month to month, this is a great option for you.
Better yet, if you are a Bank of America Preferred Rewards member, you can earn up to 5.25% back on the category of your choice, up to 3.5% back on groceries and wholesale clubs and up to 1.75% cash back on all non-bonus spending.
Venmo Credit Card
Sign-up bonus: N/A
Annual fee: $0
Rewards structure: Earn 3% on your top spending category each month, 2% on your second top spending category each month (up to $10,000 in combined bonus spending each month)
The Venmo Credit Card has exceeded my expectations since its launch. The card itself has a unique design that is personal to each cardholder (it also integrates with the app to make it easy to split payments and send/receive money) and a pretty fantastic rewards structure that automatically adjusts to your spending habits.
Unlike other cards that make you choose your categories each quarter or each month, the Venmo Credit Card does that work for you. It’ll automatically determine which are your top two spending categories each month from this list:
- Dining and nightlife
- Bills and utilities
- Health and beauty
And you’ll automatically earn 3% and 2% on your top and second top categories, respectively. Venmo defines each category pretty broadly, making it even easier to get the most from your card. Just remember that there is a $10,000 spending cap for 3% and 2% rewards.
The information for the Venmo Credit 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.
For the most part, “choose your own rewards” cards are only offered in the cash-back space. But there are a lot of benefits to having at least one cash-back card on hand — whether you’re a frequent traveler or not.
Still, I hope that more cash back and travel cards come out with personalized rewards options to help align cardholders with their particular spending needs.
Featured image by Isabelle Raphael / The Points Guy.
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Families love vacations and cash back on purchases, but not all families spend their money in the same categories every month. Each month, The Bank of America® Cash Rewards credit card allows families to earn 3% cash back in the category of their choosing: Gas, Online Shopping, Dining, Travel, Drug Stores or Home Improvement/Furnishings (on the first $2,500 in purchases each quarter; then 1%). Now you don’t need multiple cards in your wallet to maximize rewards on your ever-changing expenses.
- No annual fee
- $200 online cash rewards bonus after you make at least $1,000 in purchases in the first 90 days of account opening
- Earn 3% cash back in the category of your choice, automatic 2% at grocery stores and wholesale clubs (up to $2,500 in combined choice category/grocery store/wholesale club quarterly purchases) and unlimited 1% on all other purchases
- 0% Introductory APR for 15 billing cycles for purchases, and for any balance transfers made in the first 60 days. After the intro APR offer ends, 13.99% - 23.99% Variable APR will apply. A 3% fee (min $10) applies to all balance transfers
- No expiration on rewards
- If you're a Preferred Rewards member, you can earn 25% - 75% more cash back on every purchase
- Contactless Cards - The security of a chip card, with the convenience of a tap