Rewards Credit Cards

You should try to find a credit card with rewards if you plan to pay your bill in full every month. Otherwise, expensive finance charges will quickly eat away at your savings. And rewards should only be your top priority if you have good or excellent credit. People with lower scores may not receive high enough credit lines for their rewards to offset an annual fee. So finding a no annual fee credit card that you can get approved for should be your main goal at that point. If that card happens to offer rewards, all the better.

With that being said, simply determining that a rewards card is right for you is only half the battle. Next, you have to figure out what type of rewards you want and which particular card to apply for. Our editors’ picks for the best rewards cards are a good place to start. And if you would like a personalized rewards card recommendation based on your latest credit score, just sign up for a free WalletHub account.

If you have less-than-good credit or revolve a monthly credit card balance, you should not focus on credit cards with rewards. If you don’t have good credit, you should focus on minimizing monthly and annual fees in order to build your credit standing as inexpensively as possible. If you don’t pay your bill in full every month, the benefit provided by credit card rewards will be eroded, if not wiped out completely, by interest charges. While you might find that some credit building or 0% credit cards offer some rewards, consider that a happy accident.

As always, avoid actually using a credit card if it leads to you spend more than you would otherwise. If this occurs, pay off your credit card balances and lock your card(s) in a drawer. Don’t worry, your credit score will still benefit just from your credit card(s) reporting you as being in good standing on a monthly basis.

There are three rewards currencies: points, miles and cash back. Rewards credit cards are also targeted to three main groups: students, small business owners and people with above-average credit. And there are two main types of rewards cards: those affiliated with a particular retailer and those with no such ties.

Credit cards that are affiliated with a retailer may either work only at that retailer or provide extra rewards on purchases made from it.

For more information, check out WalletHub’s Credit Card Rewards Guide.

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.

It’s important to read the fine print when you compare credit card rewards. Some of the most important information is often buried in there.

But you’re probably not going to read a credit card’s terms and conditions from start to finish. So in the interest of not missing anything, try searching for these key terms:

1. "Expiration" – It’s crucial to know if and when your rewards will expire, especially if you like to save your earnings and cash them in all at once.
2. "Up to" – Some rewards credit cards cap how much you can earn in a certain spending category over a certain timeframe. The presence of any such limits could diminish a card’s value, depending on your spending habits.
3. "Rotating" – Credit cards often provide bonus rewards in designated spending categories that change on a quarterly basis. You typically need to sign up each quarter to get these bonus rates.
4. "Tiers" – Some credit cards will begin rewarding you at a higher rate once you cross an annual spending threshold. In these cases, it’s very important to consider how much of your spending will actually earn rewards at the card’s highest rate.