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How To Choose The Best Rewards Credit Cards


As summer travel heats up, it's an opportune time to consider a rewards credit card.

Here's what you need to know and how to choose the best rewards credit cards.

What Are The Major Types of Rewards Credit Cards?

There are several types of rewards credit cards, including cash back cards, travel rewards cards, airline credit cards and points rewards cards, among others.

Cash Back Credit Cards: Cash back cards offer cash back for every dollar spent. Typically, this can mean a flat percentage (such as 2% cash back) for all purchases. Other cash back credit cards award different percentages for rotating categories such as groceries, gas and restaurants.

Airline Rewards Credit Cards: Some travel rewards credit cards enable you to earn points that can be redeemed for flight credit, including free flights and upgrades.

Hotel Rewards Credit Cards: Some travel rewards credit cards enable you to earn points that can be redeemed at certain hotels for free nights and room upgrades.

How To Apply For A Rewards Credit Card

To qualify for the best rewards credit cards, you'll need to meet the following qualifications:

  1. Good to excellent credit: You will need at least good credit to qualify for the best rewards cards, including cash back cards and travel rewards cards. One exception is a secured credit card, which can be used to build credit and earn rewards benefits.
  2. You use a credit card for everyday purchases: If you regularly use your credit card for everyday purchases, you can start earning points, cash back and other benefits for every dollar you spend.
  3. You regularly pay your balance in full: It always make good financial sense to pay off your credit cards balance in full each month. This rule is particularly important for rewards cards, which may include a higher annual percentage rate (APR). Therefore, not paying off your credit card balance can result in higher interest costs and potentially negate the benefits of rewards cards.
  4. You are loyal to a particular hotel or airline: If cash back cards are not your preference, but you would like to find the best travel rewards cards, you can choose a certain airline co-branded credit card or hotel co-branded credit card. This can help you earn points and rewards faster by concentrating your spending with one airline or hotel.

How To Choose The Best Rewards Credit Cards

Here's what to look for when you choose the best rewards credit cards:

  1. Cash Back or Travel Rewards: Determine if you prefer a cash back card or travel rewards card.
  2. Earn Rewards: Focus on how rewards are earned with the credit card.
  3. Redeem Rewards: Focus on how rewards are redeemed with the credit card.
  4. Minimum Spending: Ensure you can meet the minimum spending requirement to earn rewards.

What Else You Should Consider

When choosing the best rewards credit cards, here are some additional considerations:

  • Sign-up bonuses: check the benefits for signing up for a new credit card
  • Additional perks: look for credit card perks such as access to airport lounges, credit for checked luggage or tickets to special events
  • Annual fees: Annual fees vary by credit card, ranging from free to several hundred dollars
  • Foreign transaction fees: Some credit cards waive foreign transaction fees when you use your credit card abroad, while others do not.

A rewards credit card can be a good financial move if you have good credit, pay your balance in full and want to earn free cash, free travel and other benefits.