Best Rewards Credit Cards for Savvy Cardholders
Best Rewards Credit Cards for Savvy Cardholders
The best rewards credit card depends on your preferences for points, miles or cash back and your credit card strategy. We offer the pros and cons of the top cards and how to pick the best rewards credit card for you.
Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.
Citi is an advertising partner.
A rewards credit card – defined as a credit card that rewards you when you spend with the card – can be a great way to earn a little extra on purchases you were going to make anyway. Depending on the flavor of rewards that suit you best – cashback, points or miles – the right rewards credit card can help you pad your savings account or help you finance a dream vacation.
We've taken a look at rewards credit cards on ValuePenguin as well as major issuer sites to compile a list of the best rewards cards in several different categories, including hotel, airline, cashback and general travel rewards cards. Depending on your goals, you can use our list below to pick the best credit card for you.
Best rewards credit cards of 2020
| Recommended cards | Best for | Credit needed | ||
|---|---|---|---|---|
| Chase Sapphire Reserve® | Travel rewards | Excellent | |
| Citi® Double Cash Card – 18 month BT offer | Cash rewards | Excellent | Apply Now
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|
| Discover it® Cash Back | Rotating categories | Excellent/Good | Read Review |
| Costco Anywhere Visa® Card by Citi | Gas rewards | Excellent | |
| Blue Cash Preferred® Card from American Express | Grocery rewards | Excellent/Good | Apply Now
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|
|
| Capital One® Savor® Cash Rewards Credit Card | Restaurant rewards | Excellent/Good | Read Review |
|
| Hilton Honors American Express Aspire Card | Hotel rewards | Excellent | Read Review |
| Delta SkyMiles® Platinum Card | Airline rewards | Good/Excellent | |
| The Business Platinum Card® from American Express | Business rewards | Excellent/Good | Read Review |
|
| Discover it® Secured | Bad credit | Limited/Bad/Poor | Read Review |
| Chase Sapphire Preferred® Card | Honorable mention | Excellent | |
|
| Capital One® Venture® Rewards Credit Card | Honorable mention | Excellent/Good | Read Review |
| Recommended cards | |
|---|---|
| Chase Sapphire Reserve® | |
| Citi® Double Cash Card – 18 month BT offer | Apply Now
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|
| Discover it® Cash Back | Read Review |
| Costco Anywhere Visa® Card by Citi | |
| Blue Cash Preferred® Card from American Express | Apply Now
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|
| Capital One® Savor® Cash Rewards Credit Card | Read Review |
| Hilton Honors American Express Aspire Card | Read Review |
| Delta SkyMiles® Platinum Card | |
| The Business Platinum Card® from American Express | Read Review |
| Discover it® Secured | Read Review |
| Chase Sapphire Preferred® Card | |
| Capital One® Venture® Rewards Credit Card | Read Review |
Comparison tool | What is a rewards credit card? | Points and miles strategy | How to choose a rewards credit card | How to compare offers | How to maximize rewards | FAQs
Best travel rewards credit card
Chase Sapphire Reserve®
- On Chase's Secure Website
$550
16.99%-23.99% Variable
Excellent
- Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
- $300 Annual Travel Credit as reimbursement for travel purchases charged to your card each account anniversary year
- 3X points on travel immediately after earning your $300 travel credit. 3X points on dining at restaurants & 1 point per $1 spent on all other purchases. $0 foreign transaction fees.
- Get 50% more value when you redeem your points for travel through Chase Ultimate Rewards. For example, 50,000 points are worth $750 toward travel
- 1:1 point transfer to leading airline and hotel loyalty programs
- Access to 1,000+ airport lounges worldwide after an easy, one-time enrollment in Priority Pass™ Select
- Up to $100 application fee credit for Global Entry or TSA Pre✓®
- One Year Complimentary Lyft Pink ($199 minimum value). Complimentary DashPass subscription from DoorDash after activating by 12/31/21.
Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening.
Our thoughts
The Chase Sapphire Reserve® retains its title as the best travel rewards credit card thanks to its earning power and how flexible its points are to redeem. You earn 3X points on travel immediately after earning your $300 travel credit. 3X points on dining at restaurants & 1 point per $1 spent on all other purchases. Although its annual fee recently increased by $100, new benefits were added that frequent travelers will enjoy. These benefits include 10X points on Lyft rides through March 2022 and $120 in DoorDash credits through December 2021.
Benefits
- Valuable welcome bonus. The card's bonus is worth $500 in cash, $750 in travel through the Ultimate Rewards® portal and can be transferred to hotel and airline partners for potentially more value.
- Annual travel credit of $300. This credit can be used to pay for any travel expense, including booking flights or hotels, taxes on award flights or public transportation. The credit also applies to grocery store and gas station purchases through December 2020.
- Unlimited 3X points on travel and dining worldwide. You'll earn 3 Chase Ultimate Rewards points per dollar on every travel and dining purchase you make anywhere in the world.
- Points are worth 50% more towards travel. You can redeem points for 1.5 cents each towards travel reservations through the Chase travel portal.
- 1:1 points transfer to hotel and airline partners. Points transfer on a 1:1 basis to three hotel and 10 airline partners, including Hyatt, United Airlines and Emirates.
- Complimentary airport lounge access. Register for a free Priority Pass™ Select membership which includes access to over 1,000 airport lounges around the world.
- Primary rental car coverage. When charging the full amount to your card, you'll receive primary rental car protection from theft or damage on your rental car when declining the company's collision insurance.
Drawbacks
- Annual fee of $550. Some travelers may find it hard to justify the large annual fee each year. This is especially true right now when most people are traveling less during the COVID-19 pandemic, though Chase has added a few limited-time benefits to compensate.
- Authorized users are $75 each. If you want to extend your benefits to an authorized user, you'll have to pay an additional $75 each year per person.
- Large minimum spend requirement. To earn the welcome bonus, you'll need to spend $4,000 within three months. For some customers, this is a difficult threshold to overcome.
Best cash rewards credit card
Citi® Double Cash Card – 18 month BT offer
- On Citibank's Secure Website
$0
13.99% – 23.99% (Variable)
Excellent
- Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
- To earn cash back, pay at least the minimum due on time.
- Balance Transfer Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will be 13.99% – 23.99%, based on your creditworthiness.
- Balance Transfers do not earn cash back.
- If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including balance transfers) by the due date each month.
- There is a balance transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater.
- The standard variable APR for Citi Flex Plan is 13.99% – 23.99% based on your creditworthiness. Citi Flex Plan offers are made available at Citi's discretion.
Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
Our thoughts
With the Citi® Double Cash Card – 18 month BT offer card, you Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. That's one of the highest earning rates currently available for a cashback card. Though the card doesn't offer a sign-up bonus, its earnings will make up for that over time if you spend enough on it. This credit card has even more value now that you can convert your cash back into Citi ThankYou Points to redeem for travel or transfer to airline and hotel partners.
Benefits
- Earn a high rate of cash back on every purchase. The card gives you the same rate of cash back on every purchase, so you don't have to worry about tracking categories.
- $0 annual fee. There is $0 annual fee to reduce the value of the cash back you earn every month.
- Cash back can be converted to points. Your cash back can be redeemed for Citi ThankYou Points at a value of $1 to 100 points. These points can be used to book travel, transfer to 16 airlines and more.
- 0% intro APR on balance transfers. If you need to transfer a balance, this card offers an intro APR of 0% for 18 months on Balance Transfers (13.99% – 23.99% (Variable) thereafter).
Drawbacks
- No welcome bonus. This card does not currently offer a welcome bonus for new applicants.
- Foreign transaction fees. If you make international purchases, you'll be charged an additional 3% foreign transaction fee.
- Penalty fees up to $40. Although Citibank won't charge you for the first late payment, each additional late fee is $40, plus Citi may incur a penalty APR of 29.99%. Additionally, returned payments are up to $40 each.
Best cash rewards credit with rotating categories
Discover it® Cash Back
Matches all of your cash back in the first year for new cardholders
Our thoughts
Some people's purchase needs change throughout the year, and the Discover it® Cash Back offers rotating quarterly bonus categories to match your spending. Each quarter, cardholders can register to Earn 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and when you pay using PayPal, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases – automatically. The card is especially lucrative in its first year, since Discover matches your cashback at the end of the year for new cardholders, essentially doubling the rewards that you earn.
Benefits
- Rotating quarterly bonus categories. Earn up to 5% cash back on the first $1,500 you spend each quarter at eligible merchants.
- Cash back is matched the first year. In place of a welcome bonus, all of your cash back earned during the first year is doubled. There are no limits on the match, so the size of your bonus is up to you.
- Reduced fees. There is no fee for your first late payment and paying late won't raise your APR. Additionally, there is no overlimit fee and None foreign transaction fees.
Drawbacks
- No traditional welcome bonus. The Discover it® Cash Back does not provide a traditional welcome bonus where you'll receive a bonus after spending a specific amount.
- Must register to earn 5% cash back. In order to receive the 5% cash back, you need to register before making the purchase.
- Registration is not retroactive. Unlike the Chase Freedom®, your registration to receive 5% cash back is not retroactive to the beginning of the quarter.
- Limited to $1,500 in spending each quarter. The 5% bonus cash back is not unlimited. After reaching the limit, your purchases will earn only 1% cash back.
Best rewards credit card for gas rewards
Costco Anywhere Visa® Card by Citi
- On Citibank's Secure Website
$0
15.24% (Variable)
Excellent
- Discover one of Citi's best cash back rewards cards designed exclusively for Costco members
- 4% cash back on eligible gas for the first $7,000 per year and then 1% thereafter
- 3% cash back on restaurants and eligible travel purchases
- 2% cash back on all other purchases from Costco and Costco.com
- 1% cash back on all other purchases
- No annual fee with your paid Costco membership and enjoy no foreign transaction fees on purchases
- Receive an annual credit card reward certificate, which is redeemable for cash or merchandise at U.S. Costco warehouses, including Puerto Rico
- The standard variable APR for Citi Flex Plan is 15.24%. Citi Flex Plan offers are made available at Citi's discretion.
Costco Anywhere Visa® Card by Citi
4% cash back on eligible gas for the first $7,000 per year
Our thoughts
The Costco Anywhere Visa® Card by Citi is an excellent option for gas purchases, since it earns 4% cash back on up to $7,000 in gas purchased from any eligible gas station each year (not just Costco gas stations). It does not have an annual fee and also awards bonus cash back on dining, travel and Costco purchases.
Benefits
- Earn up to 4% cash back. You'll earn 4% cash back on eligible gas for the first $7,000 per year and then 1% thereafter, 3% on restaurants & travel, 2% at Costco & Costco.com, 1% on all other purchases.
- $0 annual fee. Costco members pay $0 annual fee for this credit card.
- Purchase protections. Eligible purchases are covered against damage or theft during the first 120 days. Additionally, manufacturer warranties are extended by an extra year.
- No foreign transaction fees. The Costco Anywhere Visa® Card by Citi is also a good travel companion, since it doesn't charge a fee on transactions made outside the U.S.
Drawbacks
- No welcome bonus. You will not earn a welcome bonus when signing up for this card.
- You earn Costco Cash Rewards. Instead of cash back that can be used anywhere, your earnings are Costco Cash Rewards which can only be used to make purchases at Costco. These rewards are issued once a year in February in the form of a certificate and must be used in a single Costco transaction.
- If you cancel your Costco membership, you forfeit your rewards. If you cancel your membership before you receive your certificate in February, you lose all the cashback rewards for that year.
- Must be a Costco member to apply. In order to apply, you must first join Costco and pay its membership fees starting at $60. If you are declined for the card, you're out the fees paid to join Costco.
- Gas category is limited. You'll earn 4% cash back on the first $7,000 you spend on gas each year. Additional gas purchases earn just 1%.
Best rewards credit card for grocery rewards
Blue Cash Preferred® Card from American Express
- See Rates & Fees. Terms Apply.
- On American Express' Secure Website
$95
13.99%-23.99% Variable
Excellent/Good
- Earn a $250 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.
- 6% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%).
- 6% Cash Back on select U.S. streaming subscriptions.
- 3% Cash Back at U.S. gas stations and on transit (including taxis/rideshare, parking, tolls, trains, buses and more). 1% Cash Back on other purchases.
- Low intro APR: 0% for 12 months on purchases from the date of account opening, then a variable rate, currently 13.99% to 23.99%.
- Plan It® gives the option to select purchases of $100 or more to split up into monthly payments with a fixed fee and no interest.
- Cash Back is received in the form of Reward Dollars that can be redeemed as a statement credit.
- $95 Annual Fee.
- Terms Apply.
Earn a $250 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.
Our thoughts
For people who are cooking at home and streaming more shows, the Blue Cash Preferred® Card from American Express is the ideal credit card. You'll earn 6% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%). 6% Cash Back on select U.S. streaming subscriptions and 1% Cash Back on other purchases. Plus, transit and gas earn 3% cash back for when you do leave the house.
Benefits
- Earn 6% cash back on U.S. supermarket purchases. You'll earn 6% cash back on the first $6,000 you spend each year at U.S. supermarkets.
- Receive 6% cash back on streaming. Select U.S. streaming services also fall under the 6% cash back category.
- 3% cash back on transportation. Earn 3% cash back on taxis, ride-sharing services, parking, tolls and more. Plus, you'll receive 3% for all of your gas station purchases.
- Introductory 0% APR on purchases. You'll enjoy an intro APR of 0% on purchases for 12 months (13.99%-23.99% Variable thereafter). This gives you extra time to pay off your purchases without paying any interest.
Drawbacks
- Annual fee of $95. The annual fee of $95 reduces the benefit of earning cash back. You'll need to spend almost $1,600 in groceries just to break even after paying the annual fee (but it's worth it for most grocery shoppers).
- Foreign transaction fees. International purchases are charged a fee of 2.7% of each transaction after conversion to US dollars.
- Penalty fees. If you pay late or have a payment returned, you'll pay up to $40 per incident.
- Terms apply
- For rates and fees of the Blue Cash Preferred® Card from American Express, please click here.
Best rewards credit card for restaurant rewards
Capital One® Savor® Cash Rewards Credit Card
Earn a one-time $300 cash bonus after you spend $3000 on purchases within the first 3 months from account opening
Our thoughts
The Capital One® Savor® Cash Rewards Credit Card is one of the most rewarding options for people who like to eat at restaurants, attend events and have fun. You'll earn 4% Cash Back on dining; 4% Cash Back on entertainment; 2% Cash Back at grocery stores; 1% Cash Back on all other purchases. Plus, earn 8% cash back on tickets at Vivid Seats through Jan 2022. It's a cashback card, which means rewards are simple to redeem – you can apply them as credits against purchases on your credit card statement at any time. The card comes with a $0 intro for first year; $95 after that annual fee, but if you're a foodie and frequent event-goer, the rewards you earn can easily make up for that fee.
Benefits
- Unlimited 4% cash back on dining and entertainment. There is no limit to the amount of cash back you can earn when you eat out and have fun.
- Earn 8% cash back on tickets. Through Jan. 31, 2022, you'll earn 8% cash back when buying concert, sports and event tickets through Vivid Seats.
- Receive 2% cash back on groceries. For days when you want to eat in, you'll earn 2% cash back on purchases at the supermarket.
Drawbacks
- Annual fee of $0 intro for first year; $95 after that. To break even on the $0 intro for first year; $95 after that annual fee, you'll need to spend almost $2,400 each year. For some cardholders, the no-annual-fee Capital One SavorOne could be a better option.
- No balance transfer promotion. Although you will not pay a fee for transferring a balance, you will not receive a 0% APR promotion with this card.
Best hotel rewards credit card
Hilton Honors American Express Aspire Card
Earn 150,000 Hilton Honors Bonus Points after you spend $4,000 in purchases on your Card within the first 3 months of Card Membership.
Our thoughts
The Hilton Honors American Express Aspire Card is Hilton's luxury-level credit card with very lucrative benefits for frequent travelers and guests of Hilton hotels. You'll receive automatic Diamond elite status and an annual free weekend night. Big spenders can even earn a second free weekend night each year. Plus, there is a $250 annual resort credit that you can use at Hilton to pay for eligible resort charges.
Benefits
- Complimentary Hilton Honors Diamond Status. Cardholders automatically receive Hilton Honors Diamond status, which offers a 100% bonus on your base-point earnings from paid stays, room upgrades and more. Typically, you need 30 stays, 60 nights or 120,000 base points to earn Diamond elite status.
- Free weekend night rewards. You'll receive one free weekend night upon approval and each year that you renew your card. Additionally, you can earn a second free weekend night after spending $60,000 in a calendar year.
- Annual Hilton resort statement credit. You can use up to $250 in resort credits each year on eligible purchases you make at participating Hilton locations.
- Generous bonus points on purchases. Earn 14X points at Hilton and 7X points on dining and select travel with your card. All other purchases earn 3X points per dollar. That's an extremely generous earning rate. That's an extremely generous earning rate.
- Flexible policies during coronavirus. Free weekend night rewards issued through Dec. 31, 2020 can be used any night of the week. Certificates issued from May 1 through Dec. 31, 2020 are valid for 24 months instead of 12. All bonus points from May through December 2020 count towards Lifetime Diamond Status.
Drawbacks
- Annual fee of $450. The annual fee is one of the highest for a hotel credit card. Occasional travelers may not receive enough benefit to justify the high annual fee.
- High spending required to earn a second free weekend night. To earn the second free weekend night, cardholders must spend $60,000 in a calendar year. This will be difficult to achieve for many households.
- Terms apply
- For rates and fees of the Hilton Honors American Express Aspire Card, please click here.
Best airline rewards credit card
Delta SkyMiles® Platinum Card
- See Rates & Fees. Terms Apply.
- On American Express' Secure Website
$250
15.74%-24.74% Variable
Good/Excellent
- Earn 60,000 bonus miles and 5,000 Medallion Qualification Miles (MQMs) after you spend $3,000 in purchases on your new Card in your first 3 months, Offer Expires 10/28/2020.
- NEW! Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
- Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card.*Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
- NEW! With Status Boost™, earn 10,000 MQMs after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year, getting you closer to Medallion Status. MQMs are used to determine Medallion Status and are different than miles you earn toward flights.
- NEW! Fee Credit for Global Entry or TSA Pre✓®.
- Enjoy your first checked bag free on Delta Flights.
- NEW! Earn 3X Miles on Delta purchases and purchases made directly with hotels.
- Earn 1X Miles on all other eligible purchases.
- Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
- No Foreign Transaction Fees.
- $250 Annual Fee.
- Terms Apply.
Earn 60,000 bonus miles and 5,000 Medallion Qualification Miles (MQMs) after you spend $3,000 in purchases on your new Card in your first 3 months, Offer Expires 10/28/2020. .
Our thoughts
Travelers who fly regularly with Delta Air Lines will love the benefits from the Delta SkyMiles® Platinum Card. It provides an annual companion pass certificate and an accelerated path to elite status based on your spending. Plus, it earns 3 miles per dollar spent with Delta and hotels and 2 miles per dollar on dining and U.S. supermarkets.
Benefits
- Annual companion certificate. Cardholders receive a main cabin companion certificate each year to have a companion accompany them free of charge, save for taxes (up to $75 for the fare) and fees.
- First checked bag free. The first checked bag is free for the cardholder and up to eight travelers on the same itinerary while traveling with Delta. That's a savings of $240 for a family of four on a round-trip flight.
- Priority boarding for you and your companions. No matter which ticket you buy, you'll receive priority boarding with Main Cabin 1 for you and up to eight companions on the same itinerary.
- Reach Medallion status faster. The Delta Platinum card earns up to 20,000 MQMs per year based on your purchases. You'll receive 10,000 MQMs for every $25,000 you spend, up to two times per calendar year. Additionally, the MQD requirements for Delta SkyMiles elite Silver, Gold and Platinum status are waived when you spend at least $25,000 each year.
Drawbacks
- Annual fee of $250. The higher annual fee may not cover the benefits received for occasional travelers or low spenders. To maximize the benefits of this card, you should plan to spend at least $25,000 per year to earn the MQMs and MQD waiver for elite status.
- $39 fee for airport lounge access. Delta SkyMiles® Platinum Card members may access the Delta Sky Club airport lounges, however, there is a fee of $39 per person, which is pretty pricey. Cardholders may bring up to two guests with them into the lounge, but they must pay the fee as well.
- Companion certificate is for Main Cabin only. If you're flying first or business class, your companion won't be able to sit with you.
- Terms apply
- For rates and fees of the Delta SkyMiles® Platinum Card, please click here.
Best business rewards credit card
The Business Platinum Card® from American Express
Earn 75,000 Membership Rewards® points after you spend $15,000 on qualifying purchases within your first 3 months of Card Membership.
Our thoughts
The Business Platinum Card® from American Express offers many lucrative benefits for small business owners. It features up to $400 in credits toward travel and business purchases each year, making up most of the card's $595 annual fee if you take advantage of them. You'll earn 5X Membership Rewards® points on flights and prepaid hotels on amextravel.com. Get 50% more Membership Rewards® points. That's an extra half point per dollar, on each eligible purchase of $5,000 or more.
Benefits
- Up to $200 per year in Dell credits. You'll receive $100 in statement credits for Dell purchases from January to June, and another $100 from July to December each year.
- $200 airline fee credit. You'll be reimbursed for airline fees from your chosen airline when paying with your card.
- Access to Global Lounge Collection. Cardholders can use more than 1,200 airport lounges across 130 countries, including American Express Centurion Lounges, Priority Pass lounges and more.
- 35% airline bonus on redemptions. When you pay with points when booking flights, you'll get 35% of those points back. This benefit has a maximum of 500,000 points per year, and you only earn the bonus with one airline that you must designate at the beginning of the year.
- Automatic hotel elite status. Cardholders receive automatic Hilton Honors Gold and Marriott Bonvoy Gold status
Drawbacks
- High annual fee. There is a $595 annual fee for the primary cardholder.
- Fee for authorized users. Each authorized user that you add is $175 per year.
- Terms apply
- For rates and fees of The Business Platinum Card® from American Express, please click here.
Best rewards credit card for bad credit
Discover it® Secured
Matches all your cash back in the first year for new cardholders.
Our thoughts
People who are working to build or rebuild their credit will like the Discover it® Secured. Unlike many cards geared toward people with lower credit scores, the Discover it® Secured offers a good cash rewards program. Plus, Discover matches any cash back earned at the end of the first year for new cardholders, basically doubling all the rewards that you earn. After eight months, Discover performs automatic monthly reviews to see if your secured card can be transitioned to one without a security deposit. If you keep your payments timely, you'll be well on your way to better credit.
Benefits
- Cashback matches the first year. All of the cash back that you earn during the first year will be matched by Discover with no limits.
- Earn rewards on your purchases. You'll receive 2% cash back on gas and dining on up to $1,000 in purchases each quarter. All other purchases earn 1% cash back.
- You choose your security deposit. Your credit line equals your security deposit. Security deposits start at just $200.
- Automatic reviews after eight months. After eight months, Discover will review your card automatically to see if you qualify to transition to an unsecured credit card.
- Free FICO Score. You can track your progress toward building your credit with a free FICO Score online, through its app and on your monthly statement.
Drawbacks
- Credit limit is based on your security deposit. Your maximum credit limit is decided by your security deposit. Customers may have trouble saving for a larger deposit.
- Security deposit does not earn interest. You will not earn interest on your security deposit.
Honorable mentions
Chase Sapphire Preferred® Card
- On Chase's Secure Website
$95
15.99% - 22.99% Variable
Excellent
- Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 toward travel when you redeem through Chase Ultimate Rewards®.
- 2X points on travel and dining at restaurants worldwide, eligible delivery services, takeout and dining out & 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 80,000 points are worth $1,000 toward travel.
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Earn 5X points on Lyft rides through March 2022. That’s 3X points in addition to the 2X points you already earn on travel.
Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 toward travel when you redeem through Chase Ultimate Rewards®.
Our thoughts
The Chase Sapphire Preferred® Card is a good travel rewards credit card for people who want to earn flexible points. It earns 2X points on travel and dining at restaurants, eligible delivery services, takeout and dining out & 1 point per dollar spent on all other purchases worldwide. You can redeem those points practically any way you please – for cash back, for travel through Chase's travel portal for a 25% bonus, and many other options. You can also transfer points to one of Chase's airline or hotel partners at a 1:1 ratio. Plus, the card comes with other good travel benefits, including $0 foreign transaction fees and primary rental car insurance.
Benefits
- Points are worth 25% more on travel. When you redeem your Ultimate Rewards points for travel, they are worth 1.25 cents in the Ultimate Rewards travel portal. The welcome bonus of 80,000 points is worth $1,000 in travel.
- Transfer to 13 hotel and airline partners. Your points can be transferred on a 1:1 basis to three hotels and ten airline partners.
- Primary rental car protection. Your rental car is covered with primary rental car protection against theft or damage.
- Redeem points for cash back. If you need to close the card and cash out the points, you can count on getting a decent value for them – cashback redemptions are 1 cent per point.
Drawbacks
- Chase 5/24 Rule limits ability to apply. If you've opened more than five new credit cards from any bank in the last 24 months, you are unable to open this card.
- $95 annual fee. While the card's benefits, including a generous sign-up bonus, are easily worth the fee, you'll have to factor it into the equation.
Capital One® Venture® Rewards Credit Card
Capital One® Venture® Rewards Credit Card
- On Capital One's Secure Website
$95
17.24% - 24.49% (Variable)
Excellent/Good
- Earn 100,000 bonus miles when you spend $20,000 on purchases in the first 12 months from account opening, or still earn 50,000 miles if you spend $3000 on purchases in the first 3 months
- Earn unlimited 2X miles on every purchase, every day
- Miles won't expire for the life of the account and there's no limit to how many you can earn
- Receive up to $100 application fee credit for Global Entry or TSA Pre✓®
- Redeem on travel—from vacation rentals to car rentals and more. Plus transfer your miles to over 10+ travel loyalty programs
- No foreign transaction fees
Earn 100,000 bonus miles when you spend $20,000 on purchases in the first 12 months from account opening, or still earn 50,000 miles if you spend $3000 on purchases in the first 3 months.
Our thoughts
The Capital One® Venture® Rewards Credit Card makes it easy to redeem rewards for travel purchases. You earn an unlimited 2 Miles per dollar on every purchase, every day, then "erase" your travel charges up to 90 days after with the rewards that you've earned. Its loyalty program has turned into one of the best flexible points programs with the addition of airline and hotel transfer partners.
Benefits
- The same high rewards rate on every purchase. You'll earn 2 Miles per dollar on every purchase, every day without any limits.
- TSA Precheck or Global Entry reimbursement. Get reimbursed up to $100 for application fees once every four years.
- Transfer miles to airline and hotel partners. Capital One has added 10+ airline and hotel loyalty programs that you can transfer miles to. While you'll often lose value on the transfer (the ratio is 2:1.5) you can sometimes find good deals among some of these programs.
Drawbacks
- Annual fee of $95. There is an annual fee of $95, which reduces the value of the rewards you earn. You'll need to spend $4,750 to earn enough miles to break even.
Compare rewards credit cards
If you're not sure which rewards credit card is best for you, use our unique comparison tool below. The tool allows you to enter your own expenses and will then calculate which card will earn you the most rewards over a two-year period.
What is a rewards credit card?
Travel vs. cashback cards
When picking a rewards credit card, you'll need to choose between earning cash back or points or miles for travel. Most rewards credit cards earn one or the other, but some credit cards earn flexible points that can be redeemed for both travel and cash back, along with many other options.
For cardholders who travel frequently enough to use the benefits, travel cards are usually the better way to go. When you redeem points for cash back instead of travel, the value of your rewards is often lower. Travel redemptions, on the other hand, generally offer the highest value when redeeming for premium flights, high-end hotels or during popular travel periods.
Types of travel cards
Travel credit cards are popular because you can earn travel rewards with your spending. Additionally, many travel cards offer elite status and other perks that save money and improve how you travel. Most travelers would do well by having one card of each type: a credit card for the airline and hotel that they use most often, plus a flexible points card that they can use for other travel expenses.
Airline miles cards
Hotel credit cards
Flexible points cards
Defining your points and miles strategy
Before you start earning miles and points, you should have an end goal in mind. It gives you something to strive for and measure your progress against. Think about a vacation you want to plan and determine how many airline miles or hotel points you'll need. The credit card that you apply for should help you get closer to that goal.
Airline loyalty programs
Hotel loyalty programs
Where and when do you want to travel?
When picking a rewards credit card, it helps to think about when and where you want to travel. Go to the hotel's website and ensure that it has properties where you want to travel. And make sure that the airline flies to your preferred destination.
For example, if you want to visit St. Kitts in the Caribbean, your hotel brand options are Hyatt and Marriott. Earning Hilton Honors points will not help pay for your vacation since Hilton does not have any properties on the island.
How do you want to redeem your rewards?
There are many options when it comes to redeeming your rewards. Some of them offer more value than others, and not all are available with every program. Here are a few of the most popular redemption options for your rewards:
- Booking a flight
- Reserving a hotel room
- Redeem for gift cards
- Deposit cash into your bank account
- Book a rental car
- Shop online
Which travel rewards program fits your needs?
When picking a travel rewards program to earn miles and points in, make sure that it fits your needs. Look at where the airline flies to and where the hotel has locations. If the hotel or airline doesn't serve your desired destination, the program isn't right for you at this time.
For example, if you want to fly to Europe in first class, earning Southwest Rapid Rewards points is not the way to go. All Southwest Airlines routes are in the Western hemisphere – primarily in the U.S., Mexico, Latin America and the Caribbean.
Additionally, Southwest only offers economy-level seating. So, your dreams of sipping champagne in first class on your way to Paris are not possible with this airline.
How to choose a rewards credit card
Type of rewards
There are four main categories of rewards credit cards – cash back, airline miles, hotel points and flexible points. The type of credit card you choose will depend upon which of these categories of rewards is best suited to meet your goals.
Earning categories
Think about which categories you spend the most money on. Find a credit card that gives bonus rewards for spending at retailers in those categories. For example, if you travel and dine out often, look for cards that offer bonuses on travel and restaurant purchases.
Sign-up bonus
Finding a card with a large sign-up offer can jump-start your rewards earnings. However, you should review how much spending is required to earn it and how long you have to meet that hurdle. It may be the most valuable bonus you've ever seen, but if you can't reasonably spend that much in the time allowed, you won't earn the bonus. For example, some credit cards require spending $3,000 within three months of being approved.
Flexibility of redemption
Not all points are created equal. In general, airline points are primarily used to book flights for a specific airline and hotel points are used to reserve hotel rooms for a specific hotel chain. Some airline and hotel loyalty programs partner with other businesses to allow you to redeem your rewards for other uses.
Flexible point programs, such as Chase Ultimate Rewards and American Express Membership Rewards, tend to have the greatest number of redemption options, including cash back, booking travel or transfering to airline and hotel partners.
If you have specific goals in mind, then you should pick a card that earns rewards towards that goal. If not, then a flexible points card tends to be best because of the greater number of redemption options that it provides.
Transfer options
When picking a flexible points credit card, look at which airlines and hotels the bank partners with. Generally, there is not much overlap, so you'll want to pick a flexible points credit card that partners with your preferred airline or hotel (for example, American Express for Delta Air Lines).
Annual fee
Whether or not to pay an annual fee is a personal decision. Some people are against paying an annual fee for a credit card. But, if the rewards you earn and the benefits you receive are worth it, paying an annual fee can make a lot of sense.
For example, some hotel credit cards offer one free night each year after paying an annual fee of $100 or less. Depending upon how it is redeemed, that free night can be worth much more than the annual fee that you paid.
Other benefits
Travel credit cards often include a number of other benefits which can save you money and improve your travel. Some of these perks can be just as valuable (if not more) than the rewards you earn. Examples of these benefits include:
- Airport lounge access
- Primary or secondary rental car protection
- Concierge services
- TSA Precheck or Global Entry application reimbursement
- Lost baggage protection
- Flight delay or cancellation coverage
How to compare credit card offers
After reading about these rewards credit cards, you may be tempted to apply for several all at once. It is better to take it slow and easy by starting with one at a time. Here's how to compare credit card offers to decide which one is best for you.
Your yearly credit card spend. Determine how much you spend each year and in which categories. Calculate the potential rewards you'll earn based on these amounts and the bonus categories offered by the credit card.
The card's sign-up bonus. Compare the welcome bonuses offered by each credit card and determine if one is easier to achieve than the other. If you cannot reasonably spend enough to meet the minimum spend requirement, that card is not right for you.
Value of target redemption. Calculate the number of points required to redeem for your goal. How many points are required for you to be able to book your flight or hotel stay? Based on your normal spending, how long will it take you to earn those points?
Annual fee. The annual fee that you pay reduces the value of the rewards that you earn. Make sure that you're earning enough rewards to offset the annual fee and still book your travel.
Value of the card's other benefits. Some benefits are hard to place a value on and often depend on how frequently those benefits are used. In some cases, those additional perks are worth more than the welcome bonus or the rewards earned on your spending.
Below is a chart comparing the Capital One® Venture® Rewards Credit Card against the Chase Sapphire Preferred® Card. There are pros and cons to each card and your personal spending habits and goals will determine which one is right for you.
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| Earning rate | 2 Miles per dollar on every purchase, every day | 2X points on travel and dining at restaurants, eligible delivery services, takeout and dining out & 1 point per dollar spent on all other purchases worldwide.. |
| Points/miles earned ($3,600 dining and travel, $14,400 on other purchases) | 36,000 | 21,600 |
| Sign-up bonus | Earn Earn 100,000 bonus miles when you spend $20,000 on purchases in the first 12 months from account opening, or still earn 50,000 miles if you spend $3000 on purchases in the first 3 months. | Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 toward travel when you redeem through Chase Ultimate Rewards®. |
| Target redemption option | Travel statement credit (worth 1 cent/mile) | Transfer to Southwest airlines (worth 1.6 cents/point) |
| Value of rewards | (36,000 + 50,000 ) x 1 cent = $860 | (12,600 + 60,000) x 1.6 cents = $1,160.60 |
| Annual fee | $95 | $95 |
| First year value | $765 | $1,065.60 |
| Other benefits |
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How to maximize a rewards credit card
Credit card rewards can be very lucrative. In order to maximize your rewards credit card, you should follow these steps:
- Spend enough to earn the welcome bonus.
- Pay your balance off in full each month.
- Use your rewards credit card for all of your purchases.
- Know which cards earn bonus rewards at different retailers.
- Use an online shopping portal for extra rewards when making online purchases.
- Stack rewards by registering your credit card with free programs like Dosh and Rewards Network.
- Review the benefits of your rewards credit card to ensure you're not missing out on hidden perks.
- Add an authorized user to share benefits and earn additional rewards on their spending.
What is the best credit card for rewards?
The right card is one that matches your goals and the way you spend. This is a personal decision and what card is right for one person, may not be right for another. Think about where you spend the most money and what's most important (cash back, miles or points), then choose a card that works best for you.
If you're having trouble picking one, start with a flexible points credit card. The ability to earn credit card rewards today, then choose between cash back, booking travel or transferring to partners at a later date is a great feature of these cards.
Are credit card rewards taxable?
The IRS treats credit card rewards as a rebate on your purchases, therefore the rewards that you earn are generally not considered taxable. However, some banks issue 1099s when you earn rewards for referring your friends and family to apply.
Are credit card rewards worth it?
Credit card rewards are worth it if you use them effectively and plan ahead. There are countless stories of people going on amazing vacations thanks to the rewards that they've earned from their credit cards.
If you are unable to pay off your balance in full each month and end up paying interest on your balances, then credit card rewards might not be a good fit right now. A better option may be to find a credit card with a low interest rate or balance transfer offer to help you pay off your debt quickly.
How do credit card rewards work?
Credit card rewards are earned whenever you use your credit card to make a purchase. The bank charges the merchant a percentage of the transaction and shares a portion of that with you in the form of rewards. These rewards can be cash back, airline miles, hotel points, flexible points and others. Some credit cards offer additional rewards when spending with certain categories of merchants, like grocery stores, to encourage you to use the card at these stores.
How do you redeem credit card rewards?
Redemption of rewards works differently for each rewards program and what type of redemption you are making. In almost all cases, you'll log into your rewards website and follow the instructions.
Here are some examples of how to redeem your credit card rewards
- Cash back - deposit cash into your bank account, request a check, or credit to your bill.
- Airline miles - search for a flight and book using miles.
- Hotel points - choose your hotel location and travel dates, then redeem points.
- Flexible points - redeem for cash back, book travel, or transfer to hotel and airline partners.
Do credit card rewards expire?
The expiration of rewards varies from card to card. Rewards from many programs never expire as long as your account is open and active. However, some rewards have a defined lifespan. Read the fine print or search for ValuePenguin articles about whichever rewards program you choose.
What is a credit card rewards program?
Credit card rewards programs are how banks incentivize customers to use their credit cards to make purchases. These programs vary from bank to bank, but you'll generally earn either cash back, hotel points, airline miles or flexible points.
There are many credit card rewards programs available and each one is best suited for a specific type of customer. Consider what type of rewards are most important to you and which categories you spend the most when choosing your next rewards credit card.
What are cashback rewards?
Cashback rewards are when you receive a portion of your purchase back in cash. Instead of needing to memorize complicated redemption strategies and being unsure how much your rewards are worth, cashback rewards are simple and straightforward.
What are credit card points?
Credit card points are a form of rewards that can be used to book travel, redeem for cash back or other options. Most rewards credit cards earn a base number of points per dollar spent, with bonus points earned for specific categories that vary from card to card. The value of these points depends upon which program they're in and how you plan on redeeming them.
Why do credit cards give rewards?
Banks give rewards when you spend on your credit card because they charge the merchant a percentage of the transaction every time you swipe your card. The bank gives you a portion of this fee and keeps the rest for itself to pay expenses and make a profit.
Although many people pay their credit cards off in full each month, not everyone does. The bank also makes money by charging interest to people who carry a balance from month-to-month.
The information related to the Discover it® Cash Back, Capital One® Savor® Cash Rewards Credit Card, Hilton Honors American Express Aspire Card, The Business Platinum Card® from American Express, Discover it® Secured and Capital One® Venture® Rewards Credit Card has been independently collected by ValuePenguin and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply to American Express credit card offers. See americanexpress.com for more information.
Lee Huffman spent 18 years in banking and investments and now uses that insider knowledge to write about credit cards, travel and other personal finance topics. Lee enjoys showing people how to travel more, spend less and live better through the power of travel rewards. You can connect with him at BaldThoughts.com.
These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
Advertiser Disclosure: The products that appear on this site may be from companies from which ValuePenguin receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). ValuePenguin does not include all financial institutions or all products offered available in the marketplace.
How We Calculate Rewards: ValuePenguin calculates the value of rewards by estimating the dollar value of any points, miles or bonuses earned using the card less any associated annual fees. These estimates here are ValuePenguin's alone, not those of the card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer.
Example of how we calculate the rewards rates: When redeemed for travel through Ultimate Rewards, Chase Sapphire Preferred points are worth $0.0125 each. The card awards 2 points on travel and dining and 1 point on everything else. Therefore, we say the card has a 2.5% rewards rate on dining and travel (2 x $0.0125) and a 1.25% rewards rate on everything else (1 x $0.0125).