Reward Credit Cards

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How to choose a rewards credit card

By: Connor Wrenn

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Rewards programs are great for maximizing the value of your spending in a way that best suits your lifestyle. You can maximize returns where you spend the most and be compensated in ways that suit your lifestyle. However, there are a lot of factors to consider.

Which rewards to choose?
Cash back programs will give you cash, statement credits or gift cards for a certain percentage of your spending. Some programs offer a flat cash back rate, usually 1 percent. Other programs will offer a greater rate for set categories or rotating categories. With these programs, you may be able to receive up to 5 percent cash back on certain purchases!

You can also find rewards programs that pay you in “points” or “miles.” This is proprietary currency that can be redeemed in various ways. Much like cash back programs, you can find flat-rate returns on your spending, or you can find programs with bigger returns in certain categories.

Whichever program you choose should align with your values and spending. Do some homework to figure out how much you spend, on average, for categories such as restaurants, gas and airfare. You can use these numbers to figure out how to earn the most miles for your lifestyle.

That goes double for cards that offer sign-up bonuses. These bonuses are tied to hitting a spending threshold in a given time frame, usually within 90 days of receiving the card. Make sure you can comfortably hit this benchmark to fully maximize the rewards you receive from these cards.

Fees and other fine print
Rewards credit cards are more likely to carry an annual fee. Sometimes these fees are waived in the first year, but if you want to keep the card long-term, make sure the benefits to you are larger than the fee.

Many of these cards come with a 0-percent interest period as another bonus. These periods can last anywhere from 12 to 21 months. These cards can be a great option if you have a big purchase coming up and you want to give yourself some cushion to pay it off. Some of these 0-percent interest offers will also apply to balance transfers from another card. If you had some holdover debt from another card you want to get rid of, look for cards with this offer.

If you frequently travel internationally, make sure to choose a card that has no foreign transaction fee.

Finally, look at fringe perks. Pay special attention to travel rewards programs with points or miles. They may have exclusive shopping portals that allow you to rack up more points and optimize the spending of said points.

Want more information?
While some will have a fee, you can browse our cash back credit card reviews and travel credit card reviews to find some reward card options!

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