Best Overall

Chase Sapphire Reserve®

Rating as a Rewards Card
4.6
Chase Sapphire Reserve®
Full Review
Apply Now
On Chase's Website
Current Offer

50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening.

Recommended Credit Score Our recommended ranges are based off of the FICO® Score 8 credit-scoring model. Credit score is one of the many factors lenders review in considering your application.
350 579
580 669
670 739
740 799
800 850
Excellent
Regular APR (%) 16.99% - 23.99% variable
Annual Fee $550
Rewards Earning Rate Earn 3x points on travel immediately after earning your $300 travel credit, 3X points on dining at restaurants, and 1 point per $1 spent on all other purchases.
Balance Transfer Fee Either $5 or 5% of the amount of each transfer, whichever is greater.
Foreign transaction fee (%) 0%
  • WHY WE CHOSE THIS CARD

    The Chase Sapphire Reserve offers a competitive one-time point bonus, annual travel credit, and high rewards earning rate. Points are worth 50% more if you redeem them for travel through the Chase Ultimate Rewards portal, and can be transferred on a 1:1 basis to eligible hotel and airline partners. Frequent travelers also get numerous other travel-related benefits and aren't restricted to a single airline or hotel.

Best for Travel Rewards

Capital One Venture Rewards Credit Card

Rating as a Rewards Card
4.4
Capital One Venture Rewards Credit Card
Full Review
Apply Now
On Capital One's Website
Current Offer

Earn 60,000 bonus miles when you spend $3,000 on purchases in the first 3 months from account opening.

Recommended Credit Score Our recommended ranges are based off of the FICO® Score 8 credit-scoring model. Credit score is one of the many factors lenders review in considering your application.
350 579
580 669
670 739
740 799
800 850
Good - Excellent
Regular APR (%) 17.24% - 24.49% variable
Annual Fee $95
Rewards Earning Rate Earn 2 miles per dollar on every purchase. Redeem on travel-from vacation rentals to car rentals and more. Plus transfer your miles to over 10+ travel loyalty programs.
Balance Transfer Fee 3% of the amount of each transferred balance that posts to your account at a promotional APR that we may offer you. None for balances transferred at the Transfer APR.
Foreign transaction fee (%) 0%
  • WHY WE CHOSE THIS CARD

    The Capital One Venture Rewards Credit Card offers two miles for every dollar spent, and miles can be conveniently transferred to any of 10 different travel loyalty programs. The card does have an annual fee of $95 and lacks airline loyalty status for cardholders, but does not charge foreign transaction fees.

Best for Airlines

United℠ Explorer Card

Rating as a Rewards Card
4.5
United℠ Explorer Card
Full Review
Apply Now
On Chase's Website
Current Offer

40,000 bonus miles after you spend $2,000 on purchases in the first 3 months your account is open.

Recommended Credit Score Our recommended ranges are based off of the FICO® Score 8 credit-scoring model. Credit score is one of the many factors lenders review in considering your application.
350 579
580 669
670 739
740 799
800 850
Good - Excellent
Regular APR (%) 16.49% - 23.49% variable
Annual Fee $0 for the first year, then $95
Rewards Earning Rate Earn 2 miles per $1 spent at restaurants, on hotel stays, and on United purchases. 1 mile per $1 spent on all other purchases. Enjoy priority boarding privileges and visit the United ClubSM with 2 one-time passes each year for your anniversary
Balance Transfer Fee Either $5 or 5% of the amount of each transfer, whichever is greater.
Foreign transaction fee (%) 0%
  • WHY WE CHOSE THIS CARD

    The United Explorer offers the highest value per mile earned of any airline credit card, and miles can be redeemed in multiple ways, including for flights with participating member airlines in its Star Alliance, one of the largest global airline partnerships. The compelling introductory bonus of the card really adds to the value of the card because of the high value placed on redeeming those points with United. The $95 annual fee is waived the first year and the card does not charge foreign-transaction fees, making it great for international travel.

Best for Cash Back, Best No Annual Fee

Capital One Quicksilver Cash Rewards Credit Card

Rating as a Rewards Card
4.4
Capital One Quicksilver Cash Rewards Credit Card
Full Review
Apply Now
On Capital One's Website
Current Offer

Earn a one-time $200 cash bonus once you spend $500 on purchases within 3 months from account opening.

Recommended Credit Score Our recommended ranges are based off of the FICO® Score 8 credit-scoring model. Credit score is one of the many factors lenders review in considering your application.
350 579
580 669
670 739
740 799
800 850
Good - Excellent
Regular APR (%) 15.49% - 25.49% variable
Annual Fee $0
Rewards Earning Rate 1.5% cash back on every purchase, every day.
INTRO PURCHASE APR 0% for 15 Months
Balance Transfer Fee 3% of the amount of each transferred balance that posts to your account at a promotional APR that we may offer you. None for balances transferred at the Transfer APR.
Foreign transaction fee (%) 0%
  • WHY WE CHOSE THIS CARD

    The Capital One Quicksilver Cash Credit Card has a low interest rate and high rewards on all spending, plus no annual fee. The absence of a foreign-transaction fee makes this a rare cash-back credit card that’s worth bringing on a trip abroad.

Best for Bonus Points

Wells Fargo Propel American Express® Card

Rating as a Rewards Card
4.4
Wells Fargo Propel American Express® Card
Full Review
Apply Now
On Wells Fargo's Website
Current Offer

Earn 20,000 bonus points when you spend $1,000 in purchases in the first 3 months ($200 cash redemption value).

Recommended Credit Score Our recommended ranges are based off of the FICO® Score 8 credit-scoring model. Credit score is one of the many factors lenders review in considering your application.
350 579
580 669
670 739
740 799
800 850
Good - Excellent
Regular APR (%) 14.49% - 24.99% variable
Annual Fee $0
Rewards Earning Rate Earn 3X points for eating out and ordering in, gas stations, rideshares, transit, for travel including flights, hotels, homestays and car rentals, as well as popular streaming services. Earn 1X points on other purchases.
INTRO PURCHASE APR 0% for 12 Months
INTRO BALANCE TRANSFER APR 0% for 12 Months
Balance Transfer Fee Either $5 or 3% (for 120 days, then 5%) of the amount of each transfer, whichever is greater.
Foreign transaction fee (%) 0%
  • WHY WE CHOSE THIS CARD

    The Wells Fargo Propel offers 3X bonus points across more popular spending categories than other cards on our list—even those with high annual fees. With a strong bonus offer, no annual fee, and competitive intro purchase and balance transfer offers it's a solid all-around rewards card. As an added bonus, it offers cell phone protection which is a unique feature for a card with no annual fee.

Best for Hotels

Hilton Honors American Express Card

Rating as a Rewards Card
4.0
Hilton Honors American Express Card
Full Review
Apply Now
On American Express' Website
Current Offer

Earn 80,000 Hilton Honors Bonus Points with the Hilton Honors American Express Card after you use your new Card to make $1,000 in eligible purchases within the first 3 months of Card Membership.

Recommended Credit Score Our recommended ranges are based off of the FICO® Score 8 credit-scoring model. Credit score is one of the many factors lenders review in considering your application.
350 579
580 669
670 739
740 799
800 850
Good - Excellent
Regular APR (%) 15.74% - 24.74% variable
Annual Fee $0
Rewards Earning Rate 7 points per $1 for eligible Hilton purchases. 5 points per $1 for eligible purchases at U.S. restaurants, U.S. supermarkets, and U.S. gas stations. 3 points per $1 for all other eligible purchases.
Foreign transaction fee (%) 0%
  • WHY WE CHOSE THIS CARD

    The Hilton Honors American Express offers Hilton rewards points that are extremely valuable for frequent travelers. Cardholders earn seven points per dollar for Hilton stays and five points per dollar on popular spending categories like restaurants, gas, and groceries. Hilton also offers one of the largest hotel chain footprints, making it a practical choice for those seeking to earn and redeem points for future stays.

Best for Business

Capital One Spark Miles for Business

Rating as a Rewards Card
4.1
Capital One Spark Miles for Business
Full Review
Apply Now
On Capital One's Website
Current Offer

Earn 50,000 miles when you spend $4,500 in the first 3 months of account opening.

Recommended Credit Score Our recommended ranges are based off of the FICO® Score 8 credit-scoring model. Credit score is one of the many factors lenders review in considering your application.
350 579
580 669
670 739
740 799
800 850
Good - Excellent
Regular APR (%) 20.99% variable
Annual Fee $0 for the first year, then $95
Rewards Earning Rate Unlimited 2X miles per dollar on every purchase, every day.
Balance Transfer Fee There is no standard balance transfer fee for this card.
Cash Advance APR (%) 26.99%
Cash Advance Fee Either $10 or 3% of the amount of each cash advance, whichever is greater.
  • WHY WE CHOSE THIS CARD

    The Capital One Spark Miles for Business card offers 2X miles on every purchase, regardless of spending category. And, with no annual fee the first year, it's an easy card to test drive for even the smallest of business entities. By leveraging business expenses, this card should easily allow business owners to save big on future travel for business or leisure.

Best No Annual Fee Travel Rewards

Capital One VentureOne Rewards Credit Card

Rating as a Rewards Card
4.4
Capital One VentureOne Rewards Credit Card
Full Review
Apply Now
On Capital One's Website
Current Offer

Earn 20,000 miles once you spend $500 on purchases within the first 3 months from account opening.

Recommended Credit Score Our recommended ranges are based off of the FICO® Score 8 credit-scoring model. Credit score is one of the many factors lenders review in considering your application.
350 579
580 669
670 739
740 799
800 850
Good - Excellent
Regular APR (%) 15.49% - 25.49% variable
Annual Fee $0
Rewards Earning Rate Earn 1.25 miles per dollar on every purchase.
INTRO PURCHASE APR 0% for 12 Months
Balance Transfer Fee 3% of the amount of each transferred balance that posts to your account at a promotional APR that we may offer you. None for balances transferred at the Transfer APR.
Foreign transaction fee (%) 0%
  • WHY WE CHOSE THIS CARD

    The Capital One VentureOne Rewards Credit Card only offers 1.25 miles for every dollar spent, but cardholders pay no annual fee. Foreign transaction fees are still waived, and cardholders can still transfer miles to any of 10 loyalty programs.

Best for Points Earning

U.S. Bank Altitude® Go Visa Signature® Card

Rating as a Rewards Card
4.3
U.S. Bank Altitude® Go Visa Signature® Card
Full Review
Apply Now
On U.S. Bank's Website
Current Offer

Earn 25,000 bonus points worth $250. Just spend $1,000 within the first 90 days of account opening.

Recommended Credit Score Our recommended ranges are based off of the FICO® Score 8 credit-scoring model. Credit score is one of the many factors lenders review in considering your application.
350 579
580 669
670 739
740 799
800 850
Good - Excellent
Regular APR (%) 14.99% - 23.99% variable
Annual Fee $0
Rewards Earning Rate Earn 4x points on takeout, food delivery and dining, earn 2x points at grocery stores, grocery delivery, streaming services and gas stations. Earn 1 point per dollar on all other purchases.
INTRO PURCHASE APR 0% for 12 Billing Cycles
INTRO BALANCE TRANSFER APR 0% for 12 Billing Cycles
Balance Transfer Fee Either 3% of the amount of each transfer or $5 minimum, whichever is greater.
Foreign transaction fee (%) 0%
  • WHY WE CHOSE THIS CARD

    The U.S. Bank Altitude® Go Visa Signature® Card has a great rewards program for those who want to rack up points. Cardholders earn one point for every dollar they spent with the card, with rewards being doubled for spending on groceries, gas, or streaming services, and quadrupled on spending for dining and takeout. Cardholders also pay no annual fee or foreign transaction fees.

Best for Dining Rewards

Capital One SavorOne Cash Rewards Credit Card

Rating as a Rewards Card
4.4
Capital One SavorOne Cash Rewards Credit Card
Full Review
Apply Now
On Capital One's Website
Current Offer

Earn a one-time $200 cash bonus once you spend $500 on purchases within the first 3 months from account opening.

Recommended Credit Score Our recommended ranges are based off of the FICO® Score 8 credit-scoring model. Credit score is one of the many factors lenders review in considering your application.
350 579
580 669
670 739
740 799
800 850
Good - Excellent
Regular APR (%) 15.49% - 25.49% variable
Annual Fee $0
Rewards Earning Rate Earn 3% cash back on dining, 3% on entertainment, 2% at grocery stores, and 1% on all other purchases.
INTRO PURCHASE APR 0% for 15 Months
Balance Transfer Fee 3% of the amount of each transferred balance that posts to your account at a promotional APR that we may offer you. None for balances transferred at the Transfer APR.
Foreign transaction fee (%) 0%
  • WHY WE CHOSE THIS CARD

    The Capital One SavorOne Cash Rewards Credit Card offers one of the longest 0% introductory periods available—15 months. The card has no annual fee and no foreign transaction fees; and cardholders earn 3% cash back on dining and entertainment, 2% on groceries, and 1% on all other purchases.

Compare the Best Rewards Credit Cards

Credit Card Best For Rewards Rate Annual Fee
Chase Sapphire Reserve® Best Overall, Best for Travel Earn 3x points on travel immediately after earning your $300 travel credit, 3X points on dining at restaurants, and 1 point per $1 spent on all other purchases. $550
Capital One Venture Rewards Credit Card Best for Travel Rewards Earn 2 miles per dollar on every purchase. Redeem on travel-from vacation rentals to car rentals and more. Plus transfer your miles to over 10+ travel loyalty programs. $95
United℠ Explorer Card Best for Airlines Earn 2 miles per $1 spent at restaurants, on hotel stays, and on United purchases. 1 mile per $1 spent on all other purchases. Enjoy priority boarding privileges and visit the United ClubSM with 2 one-time passes each year for your anniversary. $95
Capital One Quicksilver Cash Rewards Credit Card Best for Cash Back, Best No Annual Fee 1.5% cash back on every purchase, every day. $0
Wells Fargo Propel American Express® Card Best for Bonus Points Earn 3X points for eating out and ordering in, gas stations, rideshares, transit, for travel including flights, hotels, homestays and car rentals, as well as popular streaming services. Earn 1X points on other purchases. $0
Hilton Honors American Express Card Best for Hotels 7 points per $1 for eligible Hilton purchases. 5 points per $1 for eligible purchases at U.S. restaurants, U.S. supermarkets, and U.S. gas stations. 3 points per $1 for all other eligible purchases. $0
Capital One Spark Miles for Business Best Business Rewards Unlimited 2X miles per dollar on every purchase, every day. $95
Capital One VentureOne Rewards Credit Card Best No Annual Fee Travel Rewards Earn 1.25 miles per dollar on every purchase. $0
U.S. Bank Altitude® Go Visa Signature® Card Best for Points Earning Earn 4x points on takeout, food delivery and dining, earn 2x points at grocery stores, grocery delivery, streaming services and gas stations. Earn 1 point per dollar on all other purchases. $0
Capital One SavorOne Cash Rewards Credit Card Best for Dining Rewards Earn 3% cash back on dining, 3% on entertainment, 2% at grocery stores, and 1% on all other purchases. $0

Pros & Cons of Our Picks for Best Rewards Credit Cards

Chase Sapphire Reserve

Best Overall

Offers an excellent introductory bonus for the first months of use. Users have the option to use points for travel or dining with premier travel options when purchasing through Chase Ultimate Rewards.

Pros
  • Excellent points rewards rate for travel and dining

  • Large bonus for new cardholders

  • Premium travel features

  • Points are worth 50% more for travel bought through Chase Ultimate Rewards

Cons
  • $550 annual fee

  • Limited high-rewards categories

  • Strong credit is recommended

Read the Full Chase Sapphire Reserve Credit Card Review

Capital One Venture Rewards Credit Card 

Best for Travel Rewards

A comprehensive travel rewards card that offers two miles for every dollar spent on the card. Rewards can be used across 10 popular travel loyalty programs for convenience.

Pros
  • 2 miles per dollar in spend

  • Transfer to over 10 travel loyalty programs

  • Reasonable annual fee: $95

  • No FX fees

Cons
  • No airline loyalty status

Read the Full Capital One Venture Card Review

United Explorer Card

Best for Airlines

The highest value per mile earned compared to other airline credit cards with the option to use partner airlines where United is not a good option. Users get special travel benefits and protections when flying United.

Pros
  • Valuable rewards program

  • Special benefits every time you fly United

  • Several travel benefits and protections

Cons
  • Fewer free checked bags than some competing airline cards

Read the Full United Explorer Card Review

Capital One Quicksilver Cash Rewards Credit Card

Best for Cash Back

This cash back rewards card is a triple threat for low interest, waived fees, and high cash back rewards. Users will additionally like the no penalty APR providing more flexibility with payment options.

Pros
  • Simple rewards program with a solid return

  • Decent introductory offers on purchases

  • No annual or foreign transaction fees

  • No penalty APR

Cons
  • No bonus rewards rates

  • One-time bonus is relatively modest

  • APR can be comparatively high

Read the Full Capital One Quicksilver Credit Card Review

Wells Fargo Propel American Express Card

Best for Bonus Points

Earn three times the points across the most popular spending categories that include dining, gas, and rideshares. Offers cell phone protection and has no annual fee.

Pros
  • High points earning rates in a variety of popular spending categories

  • Decent bonus for a no-annual fee card

  • Introductory 0% APR offer

  • Cell phone protection

Cons
  • Wells Fargo customer satisfaction for credit cards is below average

  • Rewards have minimum redemption thresholds

Read the Full Wells Fargo Propel Card Review

Hilton Honors American Express Card

Best for Hotels

Earn seven points per dollar spent at Hilton properties. Additionally, earn points towards Hilton stays with purchases in dining, gas, groceries, and more. We like the practicality of the Hilton footprint making redemption at a desired location simple and convenient.

Pros
  • Rewards are competitive

  • Easy to stack rewards as a Hilton Honors loyalty program member

  • Fast track your way to Hilton Honors Gold status

Cons
  • Short on premium travel perks

  • No introductory APR for purchases or balance transfers

Read the Full Hilton Honors Card Review

Capital One Spark Miles for Business

Best for Business

No spending category is required to earn two times the miles on every purchase. There is no annual fee for the first year and eligibility is lenient for every business, new and established.

Pros
  • Solid bonus, albeit with high required spending

  • Simple rewards program

  • Flexible travel-redemption options

Cons
  • Your personal credit history could be affected

  • Not as flexible as cash back

Read the Full Capital One Spark Miles for Business Review

Capital One VentureOne Rewards Credit Card 

Best No Annual Fee Travel Rewards Card

A versatile rewards card boasting 1.25 miles for every dollar spent with no annual fee to worry about. Cardholders have the opportunity to redeem miles in any of 10 loyalty programs. 

Pros
  • 1.25 miles per dollar

  • No annual fee

  • No FX fees

  • Transfer to over 10 travel loyalty programs

Cons
  • No airline status earning ability

Read the Full Capital One VentureOne Rewards Card Review

U.S. Bank Altitude® Go Visa Signature® Card 

Best for Points Earning

Maximize points earned for travel with four times the points for takeout and dining, two times the points for grocery, gas, and streaming services, and one point for all other purchases. On top of great rewards, this card boasts no annual fee. 

Pros
  • Compelling rewards program

  • No annual fee

  • No FX fee

Cons
  • None

Read the Full U.S. Bank Altitude Go Card Review

Capital One SavorOne Cash Rewards Credit Card

Best for Dining Rewards 

Excellent dining rewards with 3% on dining and entertainment, 2% on grocery purchases, and 1% on all other purchases. Enjoy a 0% APR on all new purchases for the first 15 months. 

Pros
  • 3% cash back on dining and entertainment

  • 0% APR on new purchases for 15 months

  • No annual fee

  • No FX fees

Cons
  • None

Read the Full Capital One SavorOne Cash Back Credit Card Review

Our Verdict: Best Rewards Credit Card

Rewards cards are a great way to earn cash back, miles, merchandise, or gift cards for using your credit card to make purchases. Every rewards program is different with some better than others. The Chase Sapphire Reserve is our top choice thanks to its attractive travel rewards program where you get three times the points on travel and dining to be able to utilize a reward faster. If cash back is what you value, the Capital One Quicksilver Cash Reward has no annual fee with 1.5% cash back on every purchase.

Frequently Asked Questions

How Do Rewards Credit Cards Work?

Rewards credit cards provide cash back, points, or miles for each dollar of spending. There’s typically a base rate that applies to all purchases, sometimes supplemented by higher bonus rewards for certain spending categories. Rewards are customarily redeemed for travel expenses, cash back, gift cards or merchandise through the credit card issuer’s online rewards portal. Total earned rewards can be viewed on your credit card billing statement or on the card issuer’s website when you log into your account. Rewards credit card programs vary widely. Overall, though, they share these positive and negative aspects:

Pros
  • Introductory one-time bonuses

  • Opportunities to earn bonus rewards

  • Flexible redemption options

Cons
  • Cash-back in the most rewarding categories may be capped

  • Effort and expertise required to maximize the value of points/miles

  • Redemption values vary significantly

  • The most lucrative cards have annual fees

Is a Rewards Credit Card a Good Fit?

A rewards card that provides points or miles can be lucrative, often more so than the other major variety of rewards card - those that provide rewards as plain cash-back. That said, a rewards credit card isn’t for everyone. Using a rewards card effectively requires taking the time to grasp rewards structures that can be more complex than simple flat cash back rates.

Additionally, many rewards cards also carry annual fees that can be substantial. Several of our rewards-card picks above carry fees, even if they don't start until after the first year. So, if you don’t spend a lot each month using a credit card, it may be better for you to get a card with no annual fee, though that also usually means you won't earn as much in rewards.

What are the Types of Rewards Cards?

  • Fixed-Rate Rewards. With cards like the Capital One Quicksilver Credit Card, cardholders get significant, straight-forward rewards for each dollar spent, no matter the spending category. These rewards may come in the form of points, miles, or cash back.
  • Tiered Rewards. Rewards for tiered cards also come in the form of miles, points, or cash back, but vary by spending category. Wells Fargo Propel Card users, for example, earn 3X rewards for dining, takeout, gas station purchases, rideshares, transit, travel (including flights, hotels, homestays, and car rentals), and some streaming services. Cardholders earn 1X points on other purchases.
  • Business. In addition to consumer-focused cards, there are also many rewards credit cards designed specifically to reward business spending. The Capital One Spark Miles for Business, for example, offers lenient qualification requirements for new businesses and rewards programs designed to help business owners finance the cost of business travel.

What Should You Consider to Find the Best Rewards Credit Card?

Knowing a points card will meet your needs, you now face the task to select one that best meets them. Here are some questions to help you navigate the selection process:

How much are you spending, and on what?

Since rewards among points cards vary by category, it’s important to know as precisely as possible the amounts you typically spend in which categories every month. Budgeting/tracking tools such as Mint can help with this task, since they automatically assign expenses to such spending categories as groceries, dining, and gasoline.

What might you earn from credit card rewards?

Armed with your spending record, you’re ready to assess how much you might earn each month or year on the cards you’re considering. That requires doing the math.

For example, let's say you spend an average of $2,200 per month on your Chase Sapphire Reserve® card. Let's assume that $800 of that spending is for travel and dining expenses. Each month, you would earn about 3,800 rewards points.

800 dining & travel x 3 + 1,400 for all other purchases = 3,800

And, in your first year, you would qualify for 50,000 bonus points, bringing your total points to 95,600 accumulated over your first 12 months.

3,800 points x 12 months + 50,000 bonus points = 95,600 points

If you redeem these points through Chase, each point is equal to 1.5 cents in travel rewards, or $1,434 (95,600 points x $0.015).

Plus, on your card anniversary, you'll qualify for an extra $300 travel credit.

That brings your total first-year rewards—on money you were going to spend anyway—to $1,734, less the card's $550 annual fee, or $1,184.

How much work are you prepared to do, for how much return?

If a card with tiered or rotating rewards emerges as a strong contender for you, you now need to consider the extra attention they demand to monitor your monthly spending and which categories offer bonuses. You might decide that keeping track of tiered rewards is worthwhile if there are only two tiers on the card. But, cards with multiple tiers or rotating rewards may require more work than they're worth based on your spending.

Are you comfortable with the expense of paying an annual fee?

While many rewards cards have no annual fee, you shouldn't necessarily rule out those that do carry one. For-fee cards generally offer the highest earnings. If the earnings rate of a rewards card with an annual fee looks enticing, simply calculate the yearly earnings using your predicted spending, and then subtract the cost of the fee from the total. Then, compare how the earnings figure (less the fee) stacks up against other cards that don’t charge an annual fee.

Additional considerations when selecting a rewards credit card:

  • Minimum qualification criteria (especially credit score)
  • Whether you can realistically meet spending requirements to qualify for introductory bonuses
  • Any fees (balance-transfer or foreign-transaction fees, for example)
  • Other card benefits that may be valuable, such as travel insurance
  • Whether the card offers a 0% APR introductory offer, and whether it applies to purchases, balances transfers, or both

How Can You Optimize Rewards Earnings?

Earning the most in rewards on a card entails taking advantage of all tiered or bonus spending categories, preferably up to the quarterly or annual cash-back maximum, if those are capped. It also requires planning spending so as to earn any one-time introductory bonus, if offered.

Don’t overspend, and so carry a balance, in order to reach the spending requirement for a one-time bonus, or otherwise simply to earn rewards. Unless you’re currently benefiting from a 0% APR offer, the interest you will pay on outstanding balances almost always offsets, and more, any rewards earnings.

Since APRs for rewards cards tend to be on the high side, balance carriers are best advised to find a card with lower interest on which to carry over purchases—which usually means favoring non-rewards cards.

Also, consider taking advantage of shopping rewards apps that have their own rewards. Using one of those can allow you to double dip and amplify your rewards when shopping online. Even if you’re earning only one point per dollar on your card, the app allows you to get an extra value beyond that for the same spending. Also, it’s important to “point” out that if you anticipate carrying a balance on your points rewards credit card it can be suboptimal in terms of the overall rewards earnings, as interest paid on outstanding balances almost always negates any rewards earnings, if not more.

What Are Rewards Redemption Methods?

Credit card rewards are generally simple on the earnings side with cash-back, points or miles but can be more complicated in terms of redemption and the related points or miles values involved. Cash back is much more straightforward in terms of value. Below are some common redemption methods:

  • Check—Surprisingly, most points can be converted to “cash back” since getting a check or a gift card is a common redemption option.
  • Statement Credit—Cash back rewards can be redeemed as a credit against any charges on your monthly billing statement. Points and miles can sometimes also be converted to statement credits - typically at a rate of one cent per point or mile.
  • Merchandise—Most point-redemption platforms allow points to be spent on name-brand merchandise. While this can be a tempting option, it is often the least advantageous in terms of value. Before going this route, then, it’s especially advisable to do the math, using the retail price of the item online, to determine the value you’re receiving for your rewards points.
  • Gift cards—Whether it is to a national retailer or restaurant or in the form of a Visa gift card this is a popular redemption option. However, not all reward redemptions offer good value. Make sure you’re getting proper value (that is, at least one cent per point or mile) before choosing this option.
  • Travel—Some reward programs allow points to be redeemed for airline tickets or hotel nights, which can provide superior points value.

Are Credit Card Rewards Taxable?

Luckily, the current IRS rules do not currently consider credit card rewards as taxable and the value of which do not need to be claimed on tax forms each April 15th. It’s likely this is because the rewards are earned by spending after-tax dollars on credit cards and are offered as an incentive by the card issuer. However, it is possible that the IRS may change their mind at some point in the future and begin taxing the value of rewards.

Are Rewards Credit Cards Worth It?

Rewards earned from rewards credit cards - whether in the form of cash back, miles or points, can be well worth the effort - with one big caveat. They really only make sense for consumers who pay their balance in full each month. That’s because the interest charges incurred when carrying a balance more than wipe out any benefit from any rewards that might be earned from incremental purchases. But, for those that do pay their balance in full each month, rewards are a way of leveraging their everyday spending to earn something back with every purchase to put toward travel, merchandise, gift card, or as a statement credit against their balance.

Another consideration in determining if a rewards card is worth it concerns the presence and amount of an annual fee. Many rewards cards come with no annual fee but for those that do it can be important to consider the value of any rewards that might be earned over the course of the year in order to determine if the fee is justified or not. For those that spend a lot on credit cards the rewards can be considerable. For low spenders the rewards can still be worth it but a no-annual-fee rewards card is probably a better fit.

About Our List of Points Rewards Credit Cards

For this list of the best rewards credit cards, we considered a range of card types, from cash-back cards to those affiliated with airlines and hotels to general travel cards in which the carrier issues their own points.

As part of our ongoing rating process we will re-score and publish updates of this list every month going forward.

Methodology

As part of our credit card review methodology, we gather scores of data points on more than 300 cards, including rewards, interest rate, fees, benefits, and security/customer service. Each card feature is then assigned a star rating and given a weighting based on its importance for various card categories. These weighted scores are then used to determine each card's rating for various categories, such as cash back, travel, or balance transfer. To ensure our information is as up-to-date as possible, we deploy automated tools that monitor changes in such key data as annual percentage rates, introductory rates, introductory periods, bonus offers, rewards earnings rates, fees, and card benefits. We then rapidly make any needed updates to our card listings, reviews, and recommendations to ensure that readers have the most reliable information and advice.

Meet Our Credit Cards Expert

Ben Woolsey is Investopedia's Senior Editor for Credit Cards. He has more than 30 years of experience in the financial services industry and has worked in marketing for banking and financial institutions including Associates First Capital and Bank One. Before joining Investopedia, he managed credit card content for CreditCards.com and Bankrate.com