How to choose the right rewards credit card for you

Rewards credit cards offer a variety of benefits, from travel perks to retail discounts to cash back, but it’s important to find the card that fits your interests and spending habits.

Tags: Credit, Credit cards
Published: June 03, 2020

Credit cards are easy to carry and use, and cardholders who have a rewards card gain additional benefits. Rewards cards might offer travel perks, access to discounts or even give you cash back, and they are becoming more common. According to a 2017 study, the majority of U.S. consumers — 75 percent — have a rewards program attached to their favorite card, compared to 58 percent in 2015. 1 

There is no “one size fits all” credit card, and with the variety of rewards credit cards on the market, you have plenty of options to consider.

 

Types of rewards credit cards

Before you sign up for a rewards credit card, decide which type you want. Your choices will likely include travel, merchandise or retail, cash back and premium cards. All of these cards have advantages, and which card is best depends on your personal spending habits and needs. Your goal is to choose a credit card with the most relevant rewards for you.

 

1. Travel rewards credit cards

If you travel frequently — or would like to start — a travel rewards credit card may be the right fit for you. When you use this type of credit card, you generally earn points that can be redeemed for travel-related expenses, such as airline tickets, seating upgrades, hotel stays, rental cars and travel insurance. Some travel rewards credit cards also offer access to airport lounges.

 

2. Retail rewards credit cards

Retail or merchandise rewards cards typically offer extra savings or deals on merchandise, such as gas, groceries and goods at favorite retail stores. Retail rewards cards often offer special bonus deals, so understanding all the details can help you maximize your rewards.

 

3. Cash rewards credit cards

Every time you use a cash rewards credit card, you can get back a portion of what you spent. Many cash rewards credit cards also come with extra benefits, like access to emergency or travel assistance. Look for extra deals your card might offer. These might include more cash back when you shop at certain stores or buy certain things, like food or gas. You can typically choose to receive the cash as a deposit in one of your bank accounts or as a deduction from your credit card bill.

 

4. Premium rewards credit cards

Premium cards tend to include the same type of rewards discussed above, but the rewards are usually expanded. For instance, a premium travel card may also include exclusive benefits like a 24/7 travel concierge. In exchange for these premium rewards, premium cards may have more eligibility requirements and higher fees.

 

Annual fees

Many rewards credit cards charge an annual fee for the benefits that come with the card, though the amount varies. It’s important to consider these fees when evaluating which rewards cards might be right for you. If you anticipate earning more rewards than the cost of the fee, the expense may be worth it. Premium cards usually charge a higher-than-average annual fee in order to provide exclusive services and benefits.

 

How points accumulate

Many rewards credit cards operate on a point system. Each time you use your card for eligible purchases, you earn points that correspond to the amount spent. For example, you might earn one point for every dollar. When you accumulate enough points for a reward, you redeem them. Some rewards have limitations and expiration dates. Be sure to check for disclosures and fine print to completely understand how the rewards and redemptions work.

 

Bonus points

Rewards cards often offer opportunities to earn bonus points. When you open the account, for example, you might automatically earn extra points. You might also receive more points than normal during the introductory period or for spending a certain amount every quarter or year. Additionally, many rewards cards offer point multipliers when you shop at certain retailers or use the card to pay certain bills.

 

So, the answer to which credit card has the best rewards comes down to your wants and needs. The most beneficial rewards credit card for you will have a rewards system that fits your unique interests and spending habits.

 

Ready to find the card that’s right for you?  See what’s possible with a U.S. Bank credit card.

 

 

1  https://www.tsys.com/Assets/TSYS/downloads/rs_2017-us-consumer-payment-study.pdf   - Page 24