Rewards Credit Cards

Rewards redemption is exchanging your miles/points for trips, gift cards or even put them towards your credit card bill. Personally, I'm a cash back guy so everything's straightforward for me, but you could save more with miles/points.

The best secured credit card with rewards is Discover it Secured because it has a $0 annual fee and offers 2% cash back on up to $1,000 spent at gas stations and restaurants every quarter. It also gives 1% back on all other purchases, and Discover matches all your cash back earned during the first year.

Another card in the running for best secured credit card with rewards is the AeroMexico Secured Visa. It’s extremely rare to see an airline card for bad credit. But this one gives a nice bonus of 3,500 miles and a companion ticket just for using the card once. Plus, you get 2 miles per $1 on gas and groceries and 1 on all other purchases.

The Best Western Secured card is yet another good secured credit card with rewards. It gives 3 points per $1 on Best Western purchases and 2 on everything else. And you get a 5,000-point bonus for making a single purchase.

Discover it Secured is the best secured credit card with rewards, all things considered. But it definitely isn’t the only card in the conversation. It’s good to weigh all your options before settling on the best card for you. By the way, all of these cards report to the credit bureaus on a monthly basis, giving you the chance to build credit with on-time payments.

Here are the best secured credit cards with rewards:

• Overall: Discover it Secured. $0 annual fee. $200 security deposit. 2% back on the first $1,000 spent on gas and dining per quarter. 1% back on everything else. First-year rewards doubled.
• Airline Miles: AeroMexico Secured Visa. $25 annual fee. $300 security deposit. 3,500 bonus miles and 1 companion ticket ($99 value) after first use. 2 miles per $1 spent on gas and groceries and 1 on other purchases. Companion ticket each account anniversary. Free checked bags on AeroMexico flights.
• Motorcycle Rewards: Harley-Davidson Secured Visa. $0 annual fee. $300 security deposit. 1 point per $1 on all purchases. 2,000 points gets you a $25 H-D gift card.
• Hotel Points: Best Western Secured Credit Card $29 annual fee. $300 deposit. 5,000 bonus points after first use. 3 points per $1 spent at Best Western. 2 points per $1 on other purchases. 10% discount at bwrcarddiscount.com.
• Military Community: Navy Federal Credit Union nRewards Secured Mastercard. $0 annual fee. $500 deposit. 1 point per $1 on all purchases.
• Small Business: Wells Fargo Business Secured Mastercard. $25 annual fee. $500 deposit. 1.5% cash back on all purchases.

There are a few factors you should consider when choosing a secured credit card. They include the annual fee, the minimum deposit requirement and whether the card offers rewards.

Paying an annual fee just to get rewards only makes sense if the amount you’ll earn exceeds both the fee and your expected earnings with a cheaper card combined. Fortunately, you don’t have to worry about that because the best secured credit card with rewards also happens not to charge an annual fee.

Cash back is the most versatile type of credit card rewards, as it can be redeemed for anything, and there’s never any doubt about how much it’s worth. Points have a value set by the credit card company and tend to be worth the most when redeemed for travel. Credit card companies won’t always clearly disclose points values, and those values can change over time. It’s possible that points could be worth 1 cent apiece one day and 0.8 cents each the next.

You can spend points for many different things. Usually, you can trade them for travel, gift cards, unique experiences, charitable donations or even cash. There are no restrictions on what you can use cash for. You can typically redeem cash back for a statement credit, paper check, or direct deposit to a bank account.

One thing credit card shoppers should watch out for are cards advertised as offering cash back that really provide points. For example, the Chase Freedom card offers “5% cash back” in certain bonus categories. But what it actually gives is 5 Chase Ultimate Rewards points per $1, which cardholders can then trade for cash back at a rate of 1 cent each.

Cash Back vs Points:

• Best cards: Citi Double Cash for cash back. Chase Sapphire Preferred for points.
• Best initial bonus: Bank of America Cash Rewards for cash back - $150 for spending $500 in the first 90 days. Marriott Premier Plus Credit Card for points - 100,000 points for spending $3,000 in the first 3 months.
• Earning rate: Usually at least 1% cash back or 1 point per $1 spent.
• Devaluation: Points can be devalued by the issuer, while cash back can’t.
• Redemption options: Statement credit, check or deposit for cash. Travel, merchandise, gift cards, cash and more for points.
• When it’s the best choice: Points for frequent travelers. Cash back for everyone else.

Let’s take a look at two high-profile cards in a battle of cash back vs. points.

Citi Double Cash tops the cash back offerings with 2% cash back on all purchases and an introductory APR of 0% for 18 months* on balance transfers. It also chases a $0* annual fee and requires good credit to get.

But if you have excellent credit and you’re a frequent traveler, Chase Sapphire Preferred is a more attractive option. It gives 2 points per $1 spent on travel purchases and 1 on everything else. It has an initial bonus of 50,000 points for spending $4,000 in the first 3 months. Preferred’s points are worth 1 cent each toward cash back or gift cards or 1.25 cents each toward travel. There’s a $95 annual fee, which is waived the first year. The card requires excellent credit.

For both cash back and points cards, you can expect to lose your rewards if your account closes for any reason. Most cards don’t let your rewards expire over time. But Citi Double Cash’s cash back expires if you don’t use your card for 12 months. And on points cards alone, your points can be devalued if the issuer decides to charge more points for its rewards. So frequent redemption is essential.

So the bottom line is that frequent travelers should check out points cards. Otherwise, cash is king.

Each credit card company has its own rewards program. And each credit card rewards program has a unique reputation. Some are known for good customer service. Others are notable for offering rewards cards to people with less-than-good credit.

But you’re choosing between rewards credit cards, not credit card rewards programs. So your credit card rewards comparison should focus on finding the single best rewards card for your lifestyle. In other words, the quality of a rewards program matters in the sense that it impacts what you can redeem your earnings for and how much they’re worth when you do. But a credit card’s core terms – annual fee, rewards earning rates, etc. – are what matter most.

With that being said, the first step in choosing the right rewards program is asking yourself this question: Do I rack up 30,000+ airline miles or 20+ hotel nights per year?

If your answer is “yes,” get one of WalletHub’s best travel rewards credit cards. Most people will be better off with a card that’s equally rewarding no matter where you book travel accommodations. But if you always fly with the same airline or stay at the same hotel chain, it’s worth at least considering that company’s credit card.

If you answered “no,” we recommend getting the best cash back credit card for your spending habits. Credit card companies can easily devalue points/miles by increasing the number that you need to redeem for certain items. That’s not possible with cash. Cash back rewards also give you versatility in that you can redeem earnings for any type of expense by getting a statement credit.

The best rewards credit card for fair credit is the Capital One® QuicksilverOne® Cash Rewards Credit Card, thanks to its generous earning rate and the simple fact that people with fair credit can get it. The truth is that rewards credit cards for fair credit are few and far between. And while some credit cards for people with fair credit do offer rewards, rewards should not be your focus at this point in your credit career. Your main objective should be to find a credit card with no annual fee that you can get approved for.

Once you’ve narrowed down your options, you can use rewards or low interest rates as the tiebreaker for the remaining offers. Rewards are best for people who pay their monthly credit card bills in full, while a low rate will likely offer more savings to those who foresee carrying a balance from month to month.