Credit Card Rewards Report

There is a big difference between simply getting a rewards credit card and finding the best offer for your needs. Finding any old rewards card is easy. Hundreds of offers are available, and even people with bad credit can qualify for some of them. But with numerous rewards currencies to choose from and various restrictions to watch out for, the best rewards card isn’t always so obvious.

Given that the right rewards credit card is worth more than its weight in gold, WalletHub analyzed the market to help people make truly informed choices. We compared every non-cobranded consumer rewards credit card from the 20 largest issuers (65 total offers). Specifically, we evaluated each card’s eligibility requirements, rewards earning and redemption policies, and expected rewards value.

Below, you check out our findings, plus a breakdown of the best rewards credit cards from each major issuer and some tips for choosing the right rewards card. Some of the cards listed on this page originate from our partners, but that did not impact our conclusions. Offers are accurate as of May 14th, 2019 and many are likely to have changed since.

Main Findings

 

Best Overall: Capital One has the best credit card rewards program for the fifth consecutive year, earning an average WalletHub score of 91%.

 

Earning Potential: The best rewards credit card can yield up to $1,243 more than the worst rewards card over the first two years.

 

Strategic Redemption: Redeeming credit card rewards for travel is the best deal for the fifth straight year, yielding 21% more value than merchandise, the worst option.

 

Earning Policies: Capital One leads the way with no earning limits and rewards that neither expire nor are forfeited if you miss a payment.

 

Redemption Policies: Credit card companies seem content to continue using redemption restrictions to limit the cost of rewards programs. None scored above 79%.

 

Eligibility & Transparency: Barclays, Navy Federal Credit Union, and BECU set the clearest expectations by stating rewards terms and restrictions upfront.

 

Rewards Minimums: 60% of credit cards require cardholders to earn a minimum amount of rewards before redeeming.

 

 

Conditional Rewards: 31% of rewards credit cards have earning rates that vary based on amount spent or time period.

 

 

Best Rewards Credit Cards By Issuer

WalletHub crunched the numbers, calculating how much the average person would earn with each card, after fees, over the first two years of use. We used a two-year timeframe to level the playing field between cards that offer first-year promotions (i.e., an initial bonus and/or a waived annual fee) and those that don’t.

*We considered all non-cobranded consumer rewards cards offered by each issuer. Detailed scoring for other cards considered in this report can be obtained by request.
**Bank of America: Customers enrolled in Preferred Rewards can increase their bonus by 25-75 percent, based on their banking relationship.

Remember, a card’s value figures to change based on your spending habits and the latest terms. Initial bonuses may be limited-time promotions, for example.

For more great offers, check out the complete list of WalletHub’s best rewards credit cards of 2019.

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Tips for Choosing a Rewards Card

Rewards cards aren’t one size fits all. But these tips will help you find the plastic that’s tailor-made for your wallet.

1. 1. Determine How You’ll Use It – Do you want a rewards card for all everyday expenses? Or do you want a card just for certain types of spending, such as travel purchases? It’s important to answer these questions early on because it will tell you what terms and types of cards to focus on. For example, some rewards cards offer a consistent earning rate across all spending categories. Others give you more value when you buy certain things or redeem a certain way.So figure out what exactly you’re looking for. Once you know that, it will be easy to decide whether a given credit card has what you need.

 

1. 1. Consider Both Earning & Redemption Value – It’s impossible to evaluate a rewards credit card if you don’t know how much its rewards are worth. This is obvious with cash back credit cards, but it can be tough to tell with points and miles cards. The easiest way to see how much a credit card’s points or miles are worth is to compare the number needed for a particular item (e.g., a flight) to the cost of that item if purchased independently. For example, if you need 40,000 miles for a $400 flight, the miles would be worth a penny apiece.

 

1. 1. Avoid Unnecessary Hassle – If you’re the forgetful type, stay away from cards with rotating bonus rewards categories. Such cards require you to sign-up for new bonus categories each quarter. And if you don’t, you’re unlikely to earn more than the market average that quarter.

 

1. 1. When In Doubt, Think Cash Back – You’ll never have to wonder about the rate at which you’re earning rewards with a cash back credit card. You’ll never have to worry about rewards devaluation, either. After all, you’ll be earning rewards in terms of dollars and cents.It’s a different story with points and miles cards, however. It’s hard to tell how much they’re worth. And that’s partly because credit card execs can jack up the number needed for a free flight, hotel room, statement credit, etc., whenever they please.

 

1. Don’t Rule Out Annual Fees – Often times, cards with annual fees offer better initial bonuses and higher earning rates than free cards. So don’t discount a card simply because it charges a fee, especially if it’s low. Just make sure the extra rewards you’ll earn are worth more than the fixed costs you have to pay.

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Detailed Rewards Policies By Issuer

 

*Percentage Score is calculated by dividing the Total Score by 21 points.

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Methodology

This report analyzed the rewards credit cards offered by the 20 largest credit card issuers, by outstanding balances. Information about each issuer’s non-cobranded consumer rewards cards was collected from the issuers’ websites. Once data collection was complete, we scored each card using the rubric listed below, which is comprised of four main categories:

1. Eligibility & Transparency – Max 4 points
2. Earning Policies – Max 6.5 points
3. Redemption Policies – Max 5.5 points
4. Rewards Value Per $1 Spent – Max 5 points

We averaged the individual scores for each issuer’s cards to arrive at overall issuer scores, which we then converted to percentages. Finally, we reached out to the public relations departments of each issuer to confirm our findings, and all of them did so. Data is accurate as of May 14th, 2019.

Rewards Value Per $1 Spent - Max 5 pointsTotal - Max 21 points

*Rewards Value Explanation:

We identified the best card from each issuer by calculating the two-year monetary value of each offer’s rewards (including initial bonuses), minus any annual fees.

When calculating the card’s rewards value, we picked the best redemption option – travel, gift cards, cash back or merchandise – and used the average value for that redemption option to convert rewards currency into dollar terms.

We used the following spending data from the U.S. Bureau of Labor Statistics, which you can find below, to calculate each card’s monetary value. Exact values were used whenever possible, but in certain cases – such as “Travel” – we combined categories such as “Airlines,” “Hotels,” “Other Lodging” and “Public and Other Transportation” to create a more digestible list. We assumed that half of one’s utility expenses would be charged to a credit card, as certain types – electric bills, for example – typically aren’t plastic plastic-eligible. “Other” spending represents the sum of small household spending categories: healthcare, apparel and housekeeping supplies, for instance.

Annual Consumer Spending By Category

Sources: U.S. Bureau of Labor Statistics (Consumer Expenditures in 2016 Report).

Ask the Experts

1. Do you think the average person realizes how much is at stake when shopping for a credit card?
2. 60% of rewards credit cards prevent cardholders from redeeming until they've earned a certain minimum amount in rewards - why hasn't competition eliminated such practices over the years?
3. What types of people would you recommend to seek out / avoid the 31% of rewards credit cards with earning rates that vary depending on amount spent or time period?
4. Are you surprised that 74% of people think cash back is the best kind of credit card rewards?