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Best rewards credit cards of September 2020

Rewards credit cards are an excellent way to make even the most mundane purchases fun. CardRatings editors reveal the best rewards credit cards including options for cash-back rewards, travel rewards and more.
Jennifer Doss, CardRatings Editor Last Updated, September 25, 2020

Our credit card articles, reviews and ratings maintain strict editorial integrity; however we may be compensated when you click on or are approved for offers (terms apply) from our partners. How we make money.

Best rewards credit cards Rewards credit cards offer cardholders the opportunity to earn rewards, either cash back or points/miles, each time you use your card to make a purchase, and they are among the most popular credit cards out there. Depending on the type of rewards card you're using, the rewards can be redeemed for statement credit, cash back, gift cards, airline tickets, hotel stays, car rentals and much more. No matter your lifestyle, budget or rewards goals, there's likely an excellent option available from our partners.

There are two primary types of rewards credit cards to consider: cash back rewards cards and points/miles travel rewards cards. The one that's right for you will depend on a number of factors and you can learn more about that below.

LIST OF WINNERS

BEST FLAT-RATE CASH-BACK REWARDS CARD

5
About Our Ratings

Why We Like It: Rewards credit cards can certainly be great thanks to all of the high perks that they offer, but one of their biggest downfalls is that they sometimes come with a hefty fee. While you can sometimes find a rewards credit card that offers a free introductory offer, most often, after your first year of card membership is up, you'll be responsible for paying an annual fee each year your account is open. This card, however, is a no-annual-fee option not just for your first year as a cardholder, but every year after that as well. Plus, cardholders can earn what amounts to an unlimited 2% cash back on every purchase made – 1% when you make a purchase, and then an additional 1% when you pay for those purchases in full or over time. Since this credit card is free to hold, as long as you're paying off your balance each month, you'll essentially be getting paid to use it, making this a great everyday go-to card. Citi is a CardRatings advertiser.

  • Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
  • To earn cash back, pay at least the minimum due on time.
  • Balance Transfer Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will be 13.99% - 23.99%, based on your creditworthiness.
  • Balance Transfers do not earn cash back.
  • If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including balance transfers) by the due date each month.
  • There is a balance transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater.
  • The standard variable APR for Citi Flex Plan is 13.99% - 23.99% based on your creditworthiness. Citi Flex Plan offers are made available at Citi's discretion.
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PROS:

  • We'll give a shout out to a positive that we're always happy to see - there's no annual fee.
  • You'll get your FICO score for free with this card. It's a little touch, but those little touches add up to make a really good credit card.
  • While it definitely isn't recommended, if you spend money over your credit limit, there is no fee. True, that's the case with a lot of credit cards, but it's still a good thing.

CONS:

  • When you do a balance transfer, you won't get cash back. That's not really a strike against it since that's a standard feature with credit cards, but it's good to know that before you apply.
  • This card charges foreign transaction fees, which you should keep in mind if you are planning to use it internationally.

Read our full Citi® Double Cash Card - 18 month BT offer review.

BEST ROTATING CATEGORIES CASH-BACK REWARDS CARD

5
About Our Ratings

Why We Like It: Rotating categories cash-back rewards cards generally offer the highest rewards earning out there; the catch is that your spending has to align with the bonus category. Some times it does and you can max out the spending cap, and some times it doesn't and you're stuck just not earning much that quarter. Freedom FlexSM, however, brings solied tiered rewards to the table so you can keep earning even in quarters the 5% category doesn't really fit your plans.

  • Earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening.
  • Earn 5% cash back on grocery store purchases (not including Target® or Walmart® purchases) on up to $12,000 spent in the first year.
  • Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories each quarter!
  • Earn 5% on travel purchased through Chase, 3% on dining at restaurants and drugstores, and 1% on all other purchases.
  • No annual fee.
  • 0% Intro APR for 15 months from account opening on purchases, then a variable APR of 14.99 - 23.74%.
  • No minimum to redeem for cash back. Cash Back rewards do not expire as long as your account is open.
See More

PROS:

  • Earning 5% back in rotating categories means you can plan your spending and really maximize that earning without being stuck there for longer than one quarter at a time.
  • The additional tiered cash-back categories are excellent for additional everyday spending and mean you shouldn't feel like you're missing out if the quarterly category just doesn't align with your lifestyle one quarter.
  • Your rewards, while marketed as cash back, actually accumulate as Chase Ultimate Rewards® points and can be combined with points earned using other Ultimate Rewards® cards to truly maximize your earning and the points value.

CONS:

  • There are A LOT of categories to keep up with and that's without even thinking about them changing every quarter; this isn't the card for someone who just wants to pay for everything with the same card and not employ any strategy. Remember, you only earn 1% cash back if the purchase doesn't fall under one of the other categories.
  • Pick another card as your traveling companion if you plan to head overseas or make a purchase online in a foreign currency. There are foreign transaction fees to consider here.

Read our full Chase Freedom Flex℠ review.

BEST CARDHOLDER-CHOICE CASH-BACK REWARDS CARD

Bank of America® Cash Rewards credit card

(This card is not currently available on CardRatings)

5
About Our Ratings

Why We Like It: Cardholder-choice cards are still fairly rare, but we like that they're starting to show up more because they allow each consumer to truly make the most out of their unique spending. With this card, you can chose from six categories where you want to earn top rewards – and you can change your mind as often as once per calendar month.

  • 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, 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
  • No expiration on rewards
  • If you're a Preferred Rewards member, you can earn 25% - 75% more cash back on every purchase
See More

PROS:

  • No annual fee. That's always appreciated.
  • There is no expiration on the rewards. That's always appreciated, too.
  • If you're a Preferred Rewards client with Bank of America, you can earn a 25%-75% cash back bonus on each purchase depending upon your Preferred Rewards tier.

CONS:

  • You need excellent credit for this card, which isn't a negative if you have that, but plenty of people may be frustrated by the barrier to getting this credit card.
  • This card charges foreign transaction fees, which should give you pause if you plan on doing a lot of international travel with it.

Read our full Bank of America® Cash Rewards credit card review.

BEST REWARDS CARD FOR FAMILIES

4
About Our Ratings

Why We Like It: You already spend money every week at the supermarket, and if you have a car, chances are you're spending at the gas pump on a weekly basis as well. Why not get cash back for the purchases you have to make? American Express is a CardRatings advertiser.

  • Earn a $250 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.
  • 6% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%).
  • 6% Cash Back on select U.S. streaming subscriptions.
  • 3% Cash Back at U.S. gas stations and on transit (including taxis/rideshare, parking, tolls, trains, buses and more). 1% Cash Back on other purchases.
  • Low intro APR: 0% for 12 months on purchases from the date of account opening, then a variable rate, currently 13.99% to 23.99%.
  • Plan It® gives the option to select purchases of $100 or more to split up into monthly payments with a fixed fee and no interest.
  • Cash Back is received in the form of Reward Dollars that can be redeemed as a statement credit.
  • $95 Annual Fee
  • Terms Apply.
See More

PROS:

  • This card offers a whopping 6% cash back on purchases made at U.S. supermarkets up to $6,000 per year. That works out to a maximum of $360 in cash back on supermarket purchases alone. You can also earn unlimited 3% cash back on transit and gas purchases at U.S. gas stations.
  • There is a nice introductory offer of 0% APR on all purchases for the first 12 months after card activation. After that, the rate is 13.99%-23.99% Variable, based on your creditworthiness.
  • There is an attractive welcome bonus that can be earned with even moderate spending. You earn $250 when you spend just $1,000 in the first three months of opening an account.

CONS:

  • There is an annual fee to consider. If you don't plan to use the card regularly, it may be hard to offset this.
  • This isn't the best card to travel abroad with as it charges a fee on foreign transactions.

Read our full Blue Cash Preferred® Card from American Express review.

BEST REWARDS CARD FOR DINING OUT

Capital One® Savor® Cash Rewards Credit Card

(This card is not currently available on CardRatings)
5
About Our Ratings

Why We Like It: Dining out is already fun on its own, but it's a whole lot more exciting when you know you're earning cash back while doing so! This card earns cardholders generous unlimited cash back on all dining out and entertainment purchases, making a night out on the town so much more fun. What's more, if your idea of a good time involves cooking up some new dish at home, you'll be pleased to know that you also earn bonus rewards on your grocery store purchases. And, if your love of food needs a global escape, you'll appreciate that this card won't charge you foreign transaction fees when you use it while abroad.

  • Earn a one-time $300 cash bonus after you spend $3000 on purchases within the first 3 months from account opening
  • Earn unlimited 4% cash back on dining and entertainment, 2% at grocery stores and 1% on all other purchases. Plus, earn 8% cash back on tickets at Vivid Seats through May 2020.
  • No rotating categories or sign-ups needed to earn cash rewards; plus cash back won't expire for the life of the account and there's no limit to how much you can earn
  • No foreign transaction fees
  • Capital One cardholders get access to premium experiences in dining, entertainment and more
  • $0 intro annual fee for the first year, $95 after that
See More

PROS:

  • Complimentary concierge service. You'll get personal assistance in dining, entertainment and travel, 24 hours a day, 365 days a year.
  • The card comes with nice perks such as extended warranty and travel accident insurance.
  • There are no foreign transaction fees, making it great for all of your foodie adventures both near and far.

CONS:

  • The rewards earned with the card are quite high for certain purchases, however if you are not someone who frequently eats out there are cards with higher rewards earning on grocery purchases and other categories.
  • While the card has a $0 intro annual fee for the first year, there is a $95 annual fee after that.

Read our full Capital One® Savor® Cash Rewards Credit Card review.

 

NO ANNUAL FEE, STILL REWARDING

If the Capital One® Savor® Cash Rewards Credit Card sounds like a good fit for your lifestyle but you want to avoid paying an annual fee, Capital One also offers the no-annual-fee Capital One® SavorOne® Cash Rewards Credit Card. This version still offers solid rewards of unlimited 3% cash back on dining and entertainment purchases, 2% back on grocery store purchases and 1% on everything else. The new card member offer is a bit lower at $150 cash back after you spend $500 within three months.


BEST CARD FOR GAS REWARDS

5
About Our Ratings

Why We Like It: If you're constantly on the road, thanks to the high price of gas you're probably spending a fortune every year at the pump. With this card you could help to offset this cost with a whopping five points earned on every $1 you spend on gas, as well as three points for your supermarket purchases and one point on everything else. Penfed rewards can then be redeemed for gift cards, travel, and shopping purchases, making the high cost of gas a little less painful.

  • $100 statement credit after spending $1,500 in purchase transactions within the first 90 days of account opening.
  • 0% promotional rate for 12 months on balance transfers made between now and September 30, 2020. After that, the APR for the unpaid balance and any new balance transfers will be a non-variable rate of 17.99%. 3% balance transfer fee per transaction. Subject to credit approval. If you take advantage of this balance transfer, you will immediately be charged interest on all purchases made with your credit card unless you pay the entire account balance, including balance transfers, in full each month by the payment due date.
  • Rate and offers current as of September 1, 2020 and subject to change.
  • Earn 5 points on gas purchases at the pump. Fuel purchases for airplanes and boats receive 1 point per dollar spent.
  • Earn 3 points on supermarket purchases (3 points/dollar spent)
  • Earn 1 point on all other purchases (1 point/dollar spent)
  • No annual fee
  • No foreign transaction fees
  • No cash advance fee
  • Chip and Contactless 'Tap to Pay' enabled for added security, ease and convenience at the point of sale
  • Click and Pay eligible, via Secure Remote Commerce, so you can enjoy easy and secure online buying checkout
  • Purchase variable rate as low As 13.49% APR and capped at 17.99%

PROS:

  • When it comes to cash back rewards on gas purchases, very few cards can match the PenFed Platinum Rewards Visa Signature® Card. You earn five points (5%) on every dollar spent on gas. You also earn three points for every dollar spent on groceries.
  • Traveling abroad? No problem. This card charges no foreign transaction fees.
  • This card also offers comprehensive travel accident insurance for members and their families traveling on itineraries purchased with this card.

CONS:

  • The sign-up bonus is not something that will generate much excitement. You can earn a modest $100 statement credit after you spend $1,500 in the first 90 days of account opening.
  • Access to this card is not easy. You need an excellent credit rating to be approved.

Read our full review of the PenFed Platinum Rewards Visa Signature® Card.

BEST CARD FOR AIRLINE REWARDS

5
About Our Ratings

Why We Like It: As with any airline-branded card, this card is only as good for you as your level of loyalty to the brand. However, this card does go a step further in that you earn bonus rewards for a number of your everyday purchases, so earning rewards can happen more quickly than with many branded credit cards.

  • Earn 50,000 American Airlines AAdvantage® bonus miles after $2,500 in purchases within the first 3 months of account opening
  • Earn 2 AAdvantage® miles for every $1 spent at gas stations and restaurants
  • Earn 2 AAdvantage® miles for every $1 spent on eligible American Airlines purchases
  • Earn a $125 American Airlines Flight Discount after you spend $20,000 or more in purchases during your cardmembership year and renew your card
  • No Foreign Transaction Fees
  • First checked bag is free on domestic American Airlines itineraries for you and up to four companions traveling with you on the same reservation
  • Enjoy preferred boarding on American Airlines flights
  • The standard variable APR for Citi Flex Plan is 15.99% - 24.99%, based on your creditworthiness. Citi Flex Plan offers are made available at Citi's discretion
See More

PROS:

  • No foreign transaction fee.
  • You'll receive a 25% discount on eligible inflight purchases, like food and beverages.
  • This card gives you preferred boarding on all American Airlines flights.

CONS:

  • If you're looking for a travel card with a lot of flashy perks, like access to an airport lounge, this isn't it.
  • While your miles can be redeemed for a lot of things, such as gift cards and vacation packages, you can't redeem them for cash.
  • There's an annual fee, though on the bright side, it is waived the first year.

Read our full Citi® / AAdvantage® Platinum Select® World Elite Mastercard® review.

BEST CARD FOR HOTEL REWARDS

4
About Our Ratings

Why We Like It: Twelve points per $1 spent is an almost unheard of earning rate with rewards credit cards, but that's exactly what you'll get with this card when you use is to book a hotel stay at any participating hotel or resort within the Hilton Portfolio. What's more, cardholders will also receive a generous rewards for purchases at U.S. restaurants, supermarkets and gas stations as well as on all other purchases. Also, this card generously offers cardholders 10 complimentary airport lounge access visits per year after a one-time signup with Priority Pass™ Select – that's a truly unique perk for a card with this low of an annual fee.

  • Earn 130,000 Hilton Honors Bonus Points with the Hilton Honors American Express Surpass® Card after you use your new Card to make $2,000 in eligible purchases within the first 3 months of Card Membership.
  • Earn a Weekend Night Reward from Hilton Honors after you spend $15,000 on purchases on your Card in a calendar year.
  • Earn 12X Hilton Honors Bonus Points for each dollar of eligible purchases charged on your Card directly with a hotel or resort within the Hilton portfolio.
  • Earn 6X Hilton Honors Bonus Points for each dollar of eligible purchases on your Card at U.S. restaurants, U.S. supermarkets, and U.S. gas stations.
  • Earn 3X Hilton Honors Bonus Points for all other eligible purchases on your Card.
  • Spend $40,000 on eligible purchases on your Card in a calendar year and you can earn Hilton Honors Diamond status through the end of the next calendar year.
  • $95 annual fee.
  • Terms Apply.
See More

PROS:

  • Feel free to comfortably travel abroad with this card. It does not charge foreign transaction fees.
  • Do you have bad luck sometimes with the stuff you buy? This card gives you a complimentary extended warranty, matching the existing warranty up to one additional year, if the item has a manufacturer's warranty of five years or less.
  • Do you sometimes break the stuff you buy? Anything you get with this card that winds up damaged or broken within 90 days of paying for it will be covered by purchase protection, up to $1,000 per occurrence.

CONS:

  • This card is designed for those loyal to the Hilton brand. If that's not you, you'll want to look elsewhere.
  • There is an annual fee, and it's not waived the first year like some cards.

Read our full Hilton Honors American Express Surpass® Card review.

BEST REWARDS CARDS FOR SMALL BUSINESSES

5
About Our Ratings

Why We Like It: Because there is no annual fee, this card practically pays people for using it, instead of the other way around (as long as you pay off your balance on time). We like the Ink Business Cash℠ Credit Card because it's simple. All you have to do is use it for what you'd regularly be paying for anyway, make sure to pay off your monthly balance on time, and then enjoy a little extra cash flow for things like bills or maybe something a little more exciting like employee appreciation gifts or company parties.

  • Earn $500 bonus cash back after you spend $3,000 on purchases in the first 3 months from account opening
  • Earn 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable and phone services each account anniversary year
  • Earn 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year
  • Earn 1% cash back on all other card purchases with no limit to the amount you can earn
  • 0% introductory APR for 12 months on purchases
  • Employee cards at no additional cost
  • No Annual Fee
See More

PROS:

  • You can get cards for your employees, for no extra charge, and you can control their spending limits while also earning points on those purchases.
  • If you or your employees rent a car on a business trip, your card will give you an auto rental collision damage waiver (so no need to pay for collision insurance).
  • Buying expensive equipment for the workplace? Your card comes with purchase protection and extended warranty protection.

CONS:

  • This card charges foreign transaction fees. This might not seem like much if you do a lot of traveling for business overseas, this can really bite into your bottom line.
  • While the 5% cash back for office expenses and communications is excellent, the 2% cash back on dining and gas is less so. Other cards offer a higher rate of cash back in those categories.

Read our full review of the Ink Business Cash℠ Credit Card.

 

NO ANNUAL FEE, STILL REWARDING

Sure, the Ink Business Cash℠ Credit Card is a good card in its own right, but it shines when paired with another member (or two!) of the Ink family. For instance, the Ink Business Unlimited℠ Credit Card offers an unlimited 1.5% cash back on every purchase. That means you could use the Unlimited card for all the purchases that don't earn 5% or 2% back with the Ink Business Cash℠ Credit Card. Furthermore, you could pair one or both of these cards with the Ink Business Preferred® Credit Card (discussed below) to up your earning even more and stretch your rewards a bit further upon redemption.


5
About Our Ratings

Why We Like It:With the Ink Business Preferred® Credit Card, users will have the opportunity to rack up a bunch of rewards under a high spending cap. Because the spending cap is so high, this card could work well for medium sized businesses. Additionally, redeeming your points for travel through the Chase Ultimate Rewards® program means they will be worth 25% more; that makes the welcome offer worth as much as $1,250 in travel.

  • New Offer! Earn 100k bonus points after you spend $15,000 on purchases in the first 3 months from account opening. That's $1,250 toward travel when redeemed through Chase Ultimate Rewards®
  • Earn 3 points per $1 on the first $150,000 spent on travel and select business categories each account anniversary year
  • Earn 1 point per $1 on all other purchases - with no limit to the amount you can earn
  • Points are worth 25% more when you redeem for travel through Chase Ultimate Rewards
  • Redeem points for travel, cash back, gift cards and more - your points don't expire as long as your account is open
  • No foreign transaction fees
  • Employee cards at no additional cost
  • $95 Annual Fee
See More

PROS:

  • You may save a lot in the future if you or your employees tend to drop, break or shatter your phones. This card offers cell phone insurance for the primary cardholder and employee phones on the same account. So for your smartphone, you have a smart credit card.
  • With the state of travel these days, you'll likely appreciate the trip cancellation and trip interruption insurance and trip delay reimbursement.
  • The business tools are helpful, as well; this card offers features such as bookkeeping integration and account alerts to make your accounting go more smoothly.

CONS:

  • There's a $95 annual fee, which is only really a negative if you don't spend much on the card. The more you spend, the more you save, which means you can more than offset the fee with ease.
  • This isn't a credit card that you'd want to transfer a balance to. The balance transfer fee is 5%, and if transferring debt to a low interest card is your goal, you could likely find something better.

Read our full review of the Ink Business Preferred® Credit Card.

WHAT IS A REWARDS CREDIT CARD?

As we mentioned at the top, a rewards credit card is JUST what it sounds like: a credit card that offers your cash back or points/miles each time you use the card to make a purchase. Let's take a closer look at the types:

Cash-back rewards credit cards

Cash-back rewards credit cards allow cardholders to earn a percentage of a purchase back each time they use their card, but how much they offer differ often depends on the category of the purchase you're making. For example, if you make a $1,000 purchase with a card with earns 2% cash, you've effectively earned $20 cash back on that transaction. It's important to note that some cash-back cards accumulate rewards as points that can be redeemed for merchandise or other rewards, but many simply accumulate as a percentage amount that you can then redeem for the dollar value.

Travel rewards cards tend to get most of the media coverage and attention, but a 2019 CardRatings survey revealed that cash-back rewards cards are still the most popular.

There are a few distinct types of cash-back rewards cards:

Flat-rate cash back cards: These cards offer a single percentage rate of cash back no matter where you make your purchase. These cards are excellent options for people who want to earn cash-back but who don't want to expend a lot of energy determining which card to use for each transaction in order to maximize rewards. The Citi® Double Cash Card is an example of a flat-rate card in that you earn 1% cash back on all your purchases, no matter where you use your card, and then another 1% when you pay your bill making each purchase effectively worth 2% cash back.

Tiered cash-back cards: These cards offer higher percentages of cash back in center categories that generally do not change but DO have a spending cap. For example, the Blue Cash Preferred® Card from American Express offers 6% cash back on purchases at U.S. supermarkets up to $6,000 spent annually (then, 1%) as well as 6% cash back on select U.S. streaming subscriptions, 3% back on transit and at U.S. gas stations and 1% cash back on your other purchases. As you can imagine, earning the maximum rewards with this card requires you to think about where you're using your card. It isn't as straightforward as a flat-rate cash-back card, but the rewards-earning opportunity is potentially higher.

Rotating categories cash-back cards: Stepping up the mental energy yet another level, you come to the rotating categories cards. These cards offer the highest amount of cash back, 5% is a common amount, on a particular category of purchases that changes each quarter. There's a spending cap to keep in mind and you need to "activate" the bonus categories each quarter by logging into your account. An example of this card is Chase Freedom Flex℠, which offers, among other rewards earning opportunities, 5% cash back on up to $1,500 spent in the bonus category each quarter that you activate (1% after reaching the cap).

Customer-choice cash-back cards: These are the top-of-the-line when it comes to the amount of effort a cardholder needs to put into making these cards work for them. You can think of them as hybrids of tiered and rotating categories cards. In this case, cardholders get to choose a category in which they'll earn top cash back. There's usually a spending cap and you'll need to remember to elect your category each quarter or each month depending on the card, but because you have so much flexibility, with a little planning these cards can be extremely rewarding. One example is the Bank of America® Cash Rewards credit cardthat offers 3% cash back in a category of your choosing from among the following list: gas, online shopping, dining, travel, drugstores or home improvement/furnishings. You also earn 2% cash back on your gas station and wholesale club purchases (3% and 2% earning are on up to $2,500 combined quarterly spending in choice category/gas/wholesale club purchases) and 1% on your other purchases.

One last note on cash-back rewards cards, these are NOT the type of credit cards that give you cash back at the the grocery store register or at an ATM (that's a debit card). Retrieving cash back in this manner with a credit card is considered a "cash advance" and you will, in most cases, immediately begin accruing interest on that withdrawal. Cash advances should be used in emergencies only.

Travel rewards credit cards

Other rewards credit cards, such as travel rewards cards or airline-branded and hotel-branded credit cards, earn you points or miles each time you make a purchase, but instead of redeeming these miles or points for cash back, you can use your rewards for things like airline tickets, hotel stays, gas cards, gift cards, and more. With some of these cards you can even redeem points for cash back, however, if it's cash back you want, you're better off sticking with a cash-back credit card as the redemption value will likely be better. That said, there are a number of travel rewards cards that allow you to redeem your rewards for statement credit to cover travel expenses. 

Once again, there are a few types of travel rewards cards to know:

General travel rewards: These cards allow you to accrue rewards that you will then redeem like cash at a set value – often one cent to 1.5 cents per point – to either directly purchase travel through a credit card issuer's travel portal, such as the Chase Ultimate Rewards® portal or the American Express Membership Rewards® portal, or as statement credit to cover travel-related purchases. Another option with some of these cards is that you can transfer your points to an airline or hotel loyalty program.

>>Learn more about the Chase Ultimate Rewards program and the American Express Membership Rewards program.

Hotel/airline rewards: Cardholders earn rewards in the form or points/miles in a branded loyalty program. Examples of this type of card include the Southwest Rapid Rewards® Premier Credit Card, with which cardholders earn points into a linked Rapid Rewards account, or The World Of Hyatt Credit Card through which cardholders accumulate World of Hyatt points.

HOW DO YOU CHOOSE THE BEST REWARDS CARD?

With so many great rewards credit cards available, why are you still using a basic card with no benefits? It's time to find a card that pays you for your business.

Choosing the right one can be an overwhelming process if you're new to the world of rewards cards. You have your choice of points, miles or cash back as well as incentives, signup/welcome offers and fine print to navigate. So let's answer the following question: What are the steps to choosing the best rewards credit card?

To start your search, take a look at the cards the experts cite as being the best of the best. However, remember credit card terms can change at any time so be sure to check the terms right before you decide to apply. The CardRatings team regularly updates our "best of" lists, including this article, so this is a great place to start. Or, if you already have an idea of the type of rewards card you want, take a look at one of our more specialized "best of" lists, such as best cash-back credit cards, best airline rewards credit cards, best travel rewards credit cards or best gas rewards credit cards.

Understand your own finances, lifestyle and credit needs

It is one thing to know what others think are the best credit cards, it is another to find a card that's right for you. Here's are some tips to help you narrow down the list.

  • Know your financial situation. Before applying for any card, you need to have a clear idea of where you stand financially. What is your credit score? How many cards have you applied for in the past year and from which issuers? Are you employed? Are you anticipating applying for a car loan or mortgage in the immediate future? Knowing the answers to these basic questions will help you apply for a card for which you stand a good chance of being approved. You don't want to apply for a bunch of cards for which your current financial situation will likely disqualify you.
  • Pick your rewards. Let's start with the fun part: how do you want to be rewarded? Do want cash – typically awarded as a statement credit of deposit into a qualifying account – or do you plan to travel and want to earn miles toward free flights? Other cards may reward you with points that can be redeemed for hotel visits, gift cards or merchandise.
  • Determine how the rewards are calculated. Next, figure out how you are going to rack up those points, miles or cash. Do you get a flat amount per $1 spent or are there bonuses for certain types of purchases or merchants. Are those bonuses fixed or do they change every month or quarter? Changing categories and tiered rewards are particularly common among cash-back rewards cards.
  • Look for signup/welcome bonuses and ongoing perks. Many, if not most, rewards cards offer some kind of signup/welcome bonus to new cardholders when they spend a certain amount of money on the card within a specific time frame. You'll want to make sure you can meet that spending threshold to earn the bonus. Additionally, if you are in need of an intro 0% APR period for purchases and/or balance transfers, make sure you understand those terms before applying. Lastly, take a look at the extra features and perks available to cardholders beyond the rewards earning. This could be anything from trip cancellation insurance to extended warranties on your purchases to free checked baggage for your flights and more.
  • Consider the fees. If you pay off your balance in full each month, this probably won't be as big a consideration for you; however, if you carry a balance, you need to know the interest rate so you can anticipate your payments. Furthermore, you'll want to consider whether you'll reap enough rewards to offset an annual fee and whether a card that doesn't charge foreign transaction fees it something you're looking for.
  • Read the fine print. Some cards make you jump through hoops, and you don't want these little details to catch you by surprise. Check if your rewards are capped or if there are limitations on redemption. Also find out if you need to spend a certain amount to get promised bonuses.

A rewards credit card can be a great way to put some extra money in your pocket, but you want to be sure you aren't leaving money or perks on the table by choosing the wrong card. More importantly, you want to be sure you don't do damage to your credit score by applying for, and being turned down by, the wrong card.

BEST PRACTICES AND REWARD REDEMPTION TIPS

In general, using a rewards credit card is very simple. Since credit card transactions automatically accumulate rewards on your behalf, there's little you have to do beyond using your credit card and then later deciding how you want to redeem your rewards. With this said though, it's important that you make sure to pay off your card every billing cycle, otherwise, interest charges could quickly cancel out any rewards you've accumulated.

Now that you know a bit more about the best rewards credit cards of 2020 and how to choose the right one for you, we'll leave you with a few of our best spending practice and reward redemption tips to help you make the most out of your rewards credit card.

Consider carrying more than one card. Depending on your spending habits, it might make good sense for you to utilize more than one credit card so you can maximize the rewards. Say you spend a lot on gas each year, for example, but you also fly and eat out a lot. To make the most of your rewards, it might be practical for you to have a great gas rewards card in your wallet as well as a top rewards card for dining out.

Keep your card utilization low. Just because you have a high spending limit doesn't mean you should use it all, even if doing so means you could accumulate some extra rewards. Keeping your credit card utilization low can help your credit score, and also keeps space available in case you have a large emergency purchase that you need to put on your card.

Use your rewards. This one probably seems like a no-brainer, but far too often people accumulate rewards and forget to use them. Usually, your rewards will stay in your account as long as your account is active, but it's good to have a timeline and goals in mind for when and how you'll use your rewards. Either work toward a specific goal, such as accumulating enough points to pay for a plane ticket to Europe, or redeem your rewards as they become available. Most often with cash-back credit cards taking the cash as soon as it's available, whether in the form of a statement credit or a check or deposit, is a fine idea. Keep in mind there often a minimum redemption value. What happens to your rewards when and if you close your account and knowing whether your card has a minimum redemption amount (most cash-back cards do) are two important things you'll want to find out before applying for a new credit card.

Pay your monthly balance on time. We've said it before, and we will say it again: Pay your monthly balance on time! (And in full whenever possible.) Rewards cards can be great for all of the enticing perks that they offer, but if you don't pay your bill on time, late fees can quickly cancel out any points that you've accumulated. If you carry a balance, that accumulating interest will absolutely eat into any rewards you earn.


To see the rates and fees for the cards featured in this post, please visit the following links: Blue Cash Preferred® Card from American Express (See Rates and Fees); Hilton Honors American Express Surpass® Card (See Rates and Fees)

Disclaimer: The information in this article is believed to be accurate as of the date it was written. Please keep in mind that credit card offers change frequently. Therefore, we cannot guarantee the accuracy of the information in this article. Reasonable efforts are made to maintain accurate information. See the online credit card application for full terms and conditions on offers and rewards. Please verify all terms and conditions of any credit card prior to applying.

This content is not provided by any company mentioned in this article. Any opinions, analyses, reviews or recommendations expressed here are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any such company. CardRatings.com does not review every company or every offer available on the market.

We start by looking at cash-back credit cards, usually the most straightforward and easiest type of rewards credit cards to use. First, it's important to understand that cash back credit cards are NOT the type of credit cards that give you cash back at the the grocery store register or at an ATM. Retrieving cash back in this manner is considered a "cash advance" and you will be charged a fee if you use your cash-back credit card in this way.

Instead, cash-back rewards credit cards are a type of credit card that encourages cardholders to frequently use their card in exchange for cash rewards such as statement credits, cash deposits or gift cards. With cash-back credit cards, rewards are accumulated with each $1 you spend, usually at a rate anywhere between 1-6%. For example, if you make a $1,000 purchase with a card with a 2% cash-back rewards offer, you'll earn 2,000 points on that transaction, or $20 cash back. It's important to note that some cash-back cards accumulate rewards as points that can be redeemed for merchandise or other rewards, but many simply accumulate as a percentage amount that you can then redeem for the dollar value.

Other rewards credit cards, such as travel rewards cards or airline-branded and hotel-branded credit cards, earn you points or miles each time you make a purchase, but instead of redeeming these miles or points for cash back, you can use your rewards for things like airline tickets, hotel stays, gas cards, gift cards, and more. With some of these cards you can even redeem points for cash back, however, if it's cash back you want, you're better off sticking with a cash-back credit card as the redemption value will likely be better. That said, there are a number of travel rewards cards that allow you to redeem your rewards for statement credit to cover travel expenses.

In general, using a rewards credit card is very simple. Since credit card transactions automatically accumulate rewards on your behalf, there's little you have to do beyond using your credit card and then later deciding how you want to redeem your rewards. With this said though, it's important that you make sure to pay off your card every billing cycle, otherwise, interest charges could quickly cancel out any rewards you've accumulated.

When deciding which credit card is best for you, it's important to consider your lifestyle and spending habits to determine which type of card you will benefit from the most. There's no such thing as a "one-size-fits-all" credit card, so to speak.

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