Rewards Credit Cards
By Curtis Arnold updated on May 26, 2012

Reward credit cards: super bonus or super bogus?  Rewards credit cards can give you a chance to get a little something back for all the money you spend using your card each month, so what should you consider before deciding which one is right for you?  Rewards credit cards are best for consumers interested in various types of rewards who have a good credit score and pay their balance in full each month.

Are you a good candidate for a rewards credit card?

When you were little, a cookie might have been your favorite reward for good behavior, but now that you are a grown-up, rewards like airline miles, free hotel nights and perhaps a gift card to your favorite restaurant may be more your speed. If you are contemplating completing a new credit card application, you should consider the benefits of a rewards credit card. In general, credit cards that earn you rewards points are best if you pay your balance in full each month and you have good credit.

Reward credit card options

If you have an excellent or good credit rating, you will find many choices in rewards credit cards. If you want to receive special rewards toward travel or restaurants, or other types of awards, and you generally pay your bill in full each month, these cards are a great choice for you.

Different credit card companies provide different reward options. Some credit cards come with the option of trading your rewards points for cash, while others offer a wide range of choices for your points such as airline miles, credits for a hotel stay or gift cards you can use at stores, gas stations and restaurants. Before you choose the best reward credit card for your needs, you should think about how you spend your money and which rewards are most meaningful to you.

If you like to travel, an airline credit card might be your best option. If you dine out often, you may want to try a rewards card that offers gift cards for places in your area. If you are focused on saving money, a card that you can use to pay for gas could be the best rewards credit card for your needs.

How to qualify for a rewards credit card

In addition to checking on the fine print about how your rewards credit card works, you need to be aware that most credit card companies reserve their rewards credit cards for good credit customers. In spite of the fact that these cards require good credit, they often carry a slightly higher interest rate because of the rewards you can earn. Some rewards credit cards also have a higher annual fee than credit cards without rewards.

If you intend to pay your balance in full each month, then the interest rate won't matter to you, but be sure you can continue to pay your balance every time if you choose a credit card with a higher rate.

If the annual fee is too high, you could wipe out the benefits of the rewards you are earning.

Take a few minutes to estimate how much you will charge to the card and what your rewards will be at the end of a year, then compare that to the annual fee to make sure the rewards credit card is worth the extra fee. You can begin to compare rewards credit cards by checking out the list of credit card offers on this page.

How do you choose the right rewards card for your needs?

Before you apply, you need to consider what type of rewards credit card would best fit your life. Do you travel often? Perhaps a card that offers airline miles, hotel nights, or even gas rewards would be good for you. Do you love to eat out? Look for a card that gives specific rewards for dining purchases. Just want to save a bit? Consider cash back rewards cards that give a percent of your purchases back to you.

Compare reward credit card offers

Once you have decided how you will use your reward points, you should begin to compare credit card offers to see which one offers the most rewards points for the least amount of spending. For example, if your goal is to earn airline miles, you should check:

• How quickly you can build up reward points--some rewards credit cards allow you to earn two airline miles for every dollar you charge to the credit card, while others offer one mile per dollar.
• Where you can use your rewards--not every credit card allows you to use your points toward frequent flyer miles on every airline, so check to make sure the airline you use most is on the list of rewards.
• Check the minimum balance requirement--some rewards credit cards require you to earn a minimum number of rewards points before you cash them in, so if you are planning on using your rewards points for your next hotel stay, make sure you can cash your points in on time.
• Check the expiration date--if you are going to the trouble of finding the right rewards credit card, make sure the rewards don't expire before you can use them. For instance, if you intend to build up airline miles for a once-in-a-lifetime vacation two years from now, make sure your points will still be available then.

Are rewards hard to earn? Are they hard to spend?

Rewards are earned in a variety of ways, each tied to the amount you spend. Some cards will give you two miles for every dollar spent, while some offer two points toward hotel stays for every dollar. Cards can also come with as little as a one-to-one reward. As far as spending rewards, it is important to read the fine print. Most have minimum limits you must earn before you spend, while others have fast expiration terms. Comparing rewards cards is the best way to see up front which one is right for you.

Rewards sound great; is it too good to be true?

Reward cards can be a fun way to earn a little back on your expenditures. However, as always, let the buyer beware. Rewards credit cards often carry high annual fees and sometimes even high interest rates.  If you plan to carry a balance on your card, then a rewards credit card probably isn’t right for you since the interest will quickly negate any rewards you earn.