November 24, 2024

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The best rewards credit cards for August 2024 #CashNews.co

The best rewards credit cards for August 2024 #CashNews.co

Cash News

A rewards credit card is one of the best ways to maximize every dollar you spend. But to make the most of the major savings rewards credit cards offer, you’ll need to choose the best credit card that suits your spending and how you want to use your earned rewards. We’ve put together a list of the best rewards credit cards available today to help you find the right card for you.

Annual fee: $95

Welcome offer: Enjoy $250 to use on Capital One Travel in your first cardholder year, plus earn 75,000 miles after spending $4,000 within the first 3 months of account opening

Rewards:

Recommended credit score: Good to Excellent

Benefits: The Capital One Venture card comes with up to a $100 credit every four years for TSA PreCheck or Global Entry, hotel benefits and a $50 credit when you book The Lifestyle Collection through Capital One Travel, Five Star status with Hertz rental cars, and travel and purchase protections. You’ll also have access to Capital One Dining and Capital One Experiences, which offer exclusive access and events for cardholders.

Why we like it: Capital One Venture is a travel credit card that’s easy to maximize no matter where you spend most. With 2x miles on every purchase, you can easily rack up rewards toward future travel with everyday purchases. Plus, the miles you earn are flexible. For a value of 1 cent per mile, you can use them to book new travel through Capital One Travel or redeem for past travel purchases you’ve made with your card — including airfare, hotels, car rentals, taxis, bus fares, cruises, and more. Capital One also has nearly 20 airline and hotel partners you can transfer your miles to. While the exact transfer values vary, many of these partners offer a 1:1 transfer.

Annual fee: $0

Welcome offer: Earn $200 cash back when you spend $1,500 within the first 6 months of account opening

Rewards:

  • 2% cash back on every purchase: 1% when you make a purchase and 1% when you pay it off

  • 5% cash back on hotels, rental cars, and attractions booked through Citi Travel (through Dec. 31, 2024)

Benefits: The biggest Citi Double Cash benefit is its long introductory 0% APR offer on balance transfers, which can help you pay down existing debt. Other than that, the card offers access to presales and experiences through Citi Entertainment.

Why we like it: We like the Citi Double Cash Card as a flat cash-back option for a few reasons. It earns a top rate among flat cash-back cards today, at up to 2% back. The rewards structure also encourages paying your balances in full, since you won’t earn the full 2% until you pay off your purchases. And finally, it doubles as a balance transfer card, with a very competitive long 0% APR period that you can use to pay down any existing debt before you use it as a rewards credit card.

Annual fee: $0 for the first year, then $95 (see rates and fees)

Welcome offer: Earn $250 cash back after spending $3,000 within the first 6 months of account opening

Rewards:

  • 6% cash back at U.S. supermarkets (up to $6,000 spent per year, then 1%)

  • 6% cash back on U.S. streaming services and subscriptions

  • 3% cash back on transit

  • 3% cash back at U.S. gas stations

  • 1% cash back on every other purchase

  • Cash Back is received in the form of Reward Dollars that can be redeemed as a statement credit or at Amazon.com checkout

Recommended credit score: Good to Excellent

Benefits: Blue Cash Preferred comes with a few added benefits that go a long way in reducing the annual fee cost. You’ll get monthly $7 statement credits (up to $84 per year) when you spend $9.99 or more each month on an auto-renewing Disney Bundle subscription (valid only at Disney Plus.com, Hulu.com or Plus.espn.com in the U.S.). Cash Back is received in the form of Reward Dollars that can be redeemed as a statement credit or at Amazon.com checkout.

Aside from rewards, this card comes with a competitive introductory 0% APR period for new purchases and balance transfers, which can be useful for making a large purchase or paying down any balances you already have.

Why we like it: We’ve crunched the numbers to see how much value different cash-back credit cards can offer based on average American spending data, and the Blue Cash Preferred is definitely among the most rewarding — even with its annual fee. If your spending is largely focused within this card’s rewards categories, you can get hundreds of dollars in value each year on the things you would have purchased anyway. And the added benefits, including a great 0% APR offer, offer even more ways to maximize the card’s value.

Annual fee: $95

Welcome offer: Earn 60,000 bonus points after spending $4,000 within the first 3 months of account opening (that’s $750 when you redeem through Chase Travel℠)

Rewards:

  • 5x points on travel purchased through Chase Travel (not including purchases that qualify for the $50 annual hotel credit)

  • 3x points on dining

  • 3x points on online grocery spending (excluding Target, Walmart, and wholesale clubs)

  • 3x points on select streaming services

  • 1x points on every other purchase

Recommended credit score: Good to Excellent

Benefits: Chase Sapphire Preferred’s benefits include a $50 annual hotel credit for bookings you make through Chase Travel, an anniversary bonus each year of points worth 10% of your total purchases over the previous year, and travel and purchase protections. You’ll also get some limited-time benefits with partner brands, including DoorDash, Instacart, Peloton, and Lyft.

Why we like it: The Chase Sapphire Preferred would be a great rewards card for its price based on the range of rewards categories and benefits alone, but what really sets it apart is redemption value. For the biggest potential value, you can redeem your points in the Chase Travel portal at a boosted rate of 1.25 cents per point. As an example, the card’s 60,000-point welcome offer would get you $750 in travel redemptions.

But that’s not the only lucrative way to redeem points. Chase also has a huge list of airline and hotel transfer partners you can transfer points to at a 1:1 ratio. These include domestic airlines like JetBlue and Southwest, international programs like Emirates and Flying Blue Air France KLM, and hotel brands like Marriott and Hyatt.

Annual fee: $695 (see rates and fees)

Welcome offer: 80,000 points after you spend $8,000 within the first 6 months

Rewards:

  • 5x points on flights booked directly with airlines or through Amex Travel (up to $500,000 spent per calendar year)

  • 5x points on eligible prepaid hotel bookings through Amex Travel

  • 1x points on every other purchase

Recommended credit score: Good to Excellent

Benefits: The Platinum Card may have more benefits than any other rewards card available right now, so we’ll highlight some of the most valuable. These include up to $200 in annual statement credits for eligible hotel bookings through Amex Travel, up to $200 in statement credits for qualifying airline fees with your chosen airline, up to $240 ($20 monthly) in annual statement credits for digital entertainment purchases with qualifying providers (with enrollment), statement credits that cover the full cost of eligible Walmart+ membership (up to $155 annually, with auto-renewal), up to $200 annual Uber Cash* ($15 per month, bonus $20 in December), up to $189 annual statement credits for Clear Plus membership, airport lounge access, and many more (terms apply).

*You must have the latest version of the Uber App downloaded and your eligible American Express Platinum Card must be a method of payment in your Uber account; Amex benefit may only be used in United States

Why we like it: For some, rewards cards are synonymous with luxury and premium perks — and no card is a better example of this than the Platinum Card. If you’re able to use all of the added benefits, you can more than make up the very high annual fee. Just make sure all of those credits apply to purchases you would make even without the card. If you don’t already shop at Saks, use Uber for ridesharing, or enjoy airport lounge access, for example, it’ll be difficult to maximize the Platinum Card.

As for points redemptions, this card is best if you want to use your Membership Rewards points for future flights. You may only get a full 1 cent per point when you use points to book flights through Amex Travel, while other redemption options can have a lower value. Transfer partners are another way to gain outsized rewards value, but the exact amount can depend on the partner and your itinerary.

Annual fee: $0

Welcome offer: Earn an extra 1.5% cash back (up to $300) on all purchases made in the first year (up to $20,000 in spending).
Learn more about this welcome offer.

Rewards:

  • 5% cash back on travel purchased through Chase Travel

  • 3% cash back on dining

  • 3% cash back at drugstores

  • 1.5% cash back on every other purchase

Recommended credit score: Good to Excellent

Benefits: The Chase Freedom Unlimited comes with a great 0% introductory APR offer for both new purchases and balance transfers. You’ll also get travel and purchase protections.

Why we like it: We like Chase Freedom Unlimited because it works like a hybrid rewards card in a few ways. For one, it has both tiered and flat cash-back rewards. You’ll get a minimum 1.5% back on everything you buy — already the max for some other flat cash-back cards — but also maximize a few everyday spending categories with up to 5% back.

It’s also unique in that the cash back you earn can also be used as Chase Ultimate Rewards points. You can use them to book travel through Chase Travel at a value of 1 cent per point. But if you have a Chase Sapphire Preferred® Card or Chase Sapphire Reserve® in your wallet, you can also pool your points together and get the boosted redemptions those cards offer.

For example, say you earn $300 cash back with your Chase Freedom Unlimited in a year, or 30,000 points. You could transfer them to your Chase Sapphire Reserve account, which earns a redemption value of 1.5 cents per point through Chase Travel. Now, your original 30,000 points are worth up to $450 of travel.

Annual fee: $0

Welcome offer: No welcome offer

Rewards:

Recommended credit score: (No credit history)

Benefits: In addition to rewards, you can get credit-building benefits with this card. These include an option for pre-approval and an automatic credit line review, which could get you a higher credit limit in just six months. Plus, with responsible use over time, you can earn the chance to get your deposit back and upgrade to the unsecured version of the Quicksilver card.

Why we like it: It’s somewhat rare to find secured credit cards that offer rewards — especially rewards with as much potential value as the Quicksilver Secured. We like that, on top of rewards, this card has all of the features that we look for when building credit. The automatic credit line review is a great way to score a higher credit limit without any extra upfront deposit and bring down your credit utilization, a major factor in your credit score.

The unsecured Capital One Quicksilver Cash Rewards Credit Card is also a great cash-back rewards option. The ability to earn an upgrade to that card and get your deposit back makes this card even more appealing. Not only can you earn rewards while you build credit now, but you can keep gaining value from this card over the long term.

The best rewards credit cards offer you valuable incentives (points, miles, or cash back) for money you’re already spending.

For example, someone who wants to earn rewards on everyday spending without strategizing too much may enjoy the ease of cash-back rewards. On the other hand, if you are a jet-setter, you may use the Capital One miles program whenever you have travel purchases for its unique earnings.

However, if you’re like many spenders, you may do a little bit of both and have acquired different credit cards for different purposes. Perfectly acceptable, and arguably a smart way to maximize earnings.

Remember that your rewards credit card is still a high-interest credit card. Maximizing your rewards only works if you’re not carrying a balance on the card — which can quickly lead to expensive credit card debt.

Find a card that earns rewards on the purchases you already make most, and track your budget so you don’t overspend each month. You can save a lot of money with rewards, but only if it’s not costing you in interest at the same time.

As a credit cardholder, you should know exactly how to best earn and redeem rewards with your card. That starts with learning the differences between each reward type: how to earn them and the most valuable ways to use them.

Depending on the card you choose, each credit card issuer’s rewards program will differ. Some may offer the same value for your rewards whether you redeem for gift cards, cash, or travel, while others may offer much higher redemption value for one over another. Always read the terms of your card’s rewards program to best maximize it over the long term.

Credit cards that earn points are often part of a larger rewards program, such as American Express Membership Rewards. You can earn points on every purchase, but will get extra points in specific bonus categories, which may range from dining out to streaming services to travel spending and more.

Points are a flexible rewards currency. You can redeem them for statement credits, travel, partner transfers, gift cards, and more. Many points-earning cards are travel rewards credit cards, so you’ll often find travel redemptions are most valuable.

Best for: Credit card points are best suited for individuals with varied spending habits and looking for flexibility in their redemption options. They’re particularly beneficial for those who prefer a range of rewards rather than being restricted to cash back or specific travel perks. However, you will find that many points-earning cards offer great travel rewards and redemptions.

  • Sign-up bonuses: Many credit cards offer lucrative bonuses for new cardholders once they spend a certain amount within the first few months.

  • Regular purchases: Cardholders typically earn points for every dollar they spend on eligible purchases.

  • Bonus categories: Some cards offer higher point rates for specific categories, like dining, supermarkets, or gas stations.

  • Shopping portals: Many credit card issuers have online shopping portals where users can earn extra points by shopping with partner retailers.

  • Special promotions: Occasionally, issuers might run promotions or partnerships where cardholders can earn additional points for a limited time.

Credit cards with miles rewards are almost always travel credit cards. They may be general cards, like cards that earn Capital One miles, or co-branded cards that earn miles with a specific airline. They often have travel-related bonus categories but you’ll find many of these cards with everyday bonus categories, too. You can typically redeem miles for travel expenses, including airfare, upgrades, and other benefits.

Best for: Credit card miles are ideal for frequent travelers, be it for business or leisure. They cater to individuals who are looking to offset their travel expenses or enjoy travel perks, such as airport lounge access, priority boarding, and free baggage check. Many cards that earn miles are also co-branded airline cards, making them a good choice for travelers who prefer flying with a specific brand each time.

  • Sign-up bonuses: Many miles-based credit cards offer a sizable chunk of miles as a bonus for new users who meet a certain spending threshold within the initial months.

  • Everyday purchases: Typically, cardholders earn a set number of miles for every dollar they spend.

  • Travel-related expenses: Many travel credit cards offer additional miles for expenses related to travel, like booking flights, hotels, or car rentals with the associated brand or partners.

  • Dining programs: Some card issuers have dining reward programs that give extra miles when you dine at partner restaurants.

  • Promotional campaigns: Issuers often run limited-time offers where spending in certain categories or with certain partners can yield bonus miles.

Cash back may be the most straightforward form of credit card rewards. Cash-back credit cards return a percentage of each purchase amount to you as a reward. Rewards categories generally focus on everyday spending, like grocery stores, gas stations, and online purchases. When you’re ready to redeem, you can trade in your cash back for a statement credit or receive the cash value as a check or bank account deposit.

Best for: Cash-back credit cards are ideal for individuals who value straightforward rewards and are looking for tangible, immediate returns on their spending. They are especially beneficial for those who may not travel frequently and prefer a clear-cut, monetary reward over points or miles.

  • Sign-up bonuses: Some cash-back cards offer a bonus cash reward for new users who spend a specific amount within the first few months.

  • Everyday purchases: Cardholders earn a defined percentage back on all qualifying purchases.

  • Category-specific rewards: Many cash-back cards offer higher percentages for specific categories, such as groceries, gas, or dining.

  • Rotating categories: Some cards offer higher cash-back rates on categories that change periodically, requiring cardholders to activate these categories to earn the bonus.

  • Shopping through issuer portals: Similar to points-based cards, some cash-back cards allow users to earn additional rewards by shopping through the issuer’s online portal with partner retailers.

You can choose the best rewards credit card for you with one question: “Which card benefits me the most?”

You’ll want to figure out what your goals for rewards are, identify your spending patterns, and then compare the rewards for different cards and whether their benefits are fleeting or if they’re long term.

Start by pinpointing the type of rewards that align with your lifestyle and aspirations. Are you aiming for straightforward cash back, or are you more interested in accumulating points or miles for unique experiences and travel?

A careful review of your monthly expenses will help you identify where you spend most. This insight can guide you to cards that reward those specific categories more generously.

Craft a concise list of potential cards, emphasizing those with higher rates and compelling introductory bonuses or welcome offers. This comparative approach ensures you’ll get the most value for your spending.

Don’t immediately jump at the card with the highest welcome or introductory bonus. These are fleeting, and after the dust settles you want a card that will benefit you now and in the future.

Before diving into an application, check if you can pre qualify before you open an account. It provides an early indication of your likelihood of approval without impacting your credit score.

Comparing rewards credit cards (or any credit card for that matter) is a personal choice that depends on your unique finances and personal spending. But you can start by considering these six major factors when weighing the options:

While there are cards that have no annual fee or waive the annual fee for the first year, standard annual fees range from below $100 to over $500. The point isn’t the fee itself. The one question you need to ask is “Will the benefits offset the cost?”

Before applying, it helps to have a good idea of how much you can expect to earn over time. To do this, take your average spending and compare it to the rewards offered.

For example, if you’re researching a flat rate 1.5% unlimited cash-back card and you spend roughly $500 on your card per week, here’s what your approximate annual return will be:

  • $500 p/week x 52 weeks = $26,000 in annual spending

  • $26,000 x .015 (1.5% cash back) = $390 cash rewards

While some rewards credit cards offer blanket points, miles, and cash back for every purchase, not all of them do. Some have tiered programs where you earn more in one category and less in another. For example:

Credit Card X offers the following spending categories:

  • 5x points on gas and grocery store purchases

  • 3x points on dining and takeout

  • 1x points on everything else

Welcome bonuses vary but typically keep the same stipulations. A new cardholder, upon approval, will be gifted a “bonus reward” either in miles, points, or cash back.

Here’s the catch:

  • You usually have to spend a certain amount within a given timeframe to receive the bonus (example: spend $500 in the first 3 months and receive $200 cash back)

  • If you fail to make your payments on time or don’t spend the allotted amount during the introductory window, you forfeit the bonus

Introductory APR offers will allow a free pass on incurring interest for any balances held during that period. They often apply to new purchases or balance transfers (or both). But once the period expires you will incur interest charges for outstanding balances when your billing cycle ends.

The average rewards credit card interest (APR) is currently over 24%. And that is for rewards cards in general. Airline credit cards are even higher, having an average interest rate of over 25%.

If you’re planning on paying off your balance every month, there is no need to worry about this interest rate.

While some credit card companies don’t divulge this information, it’s an unwritten rule that some credit cards are gatekept for those who have:

That being said, don’t waste a hard credit inquiry on a card that is presumably out of your credit realm. For example:

A student with no established credit will have a much better chance of getting a student credit card or a secured credit card than The Platinum Card® from American Express (see rates and fees).

Look for a “pre-approval.” Some credit card companies offer pre-approvals on select cards. This will let you know if you have a good chance of getting approved without a hard credit inquiry.

Every swipe of your credit card can earn you a reward, but how much? These are the five steps you can apply to almost any transaction:

  • Identify the reward rate: Check your credit card’s terms and conditions. In our example, the reward rate is 2% flat cash back.

  • Determine the purchase amount: This would be the total amount you spent. Let’s say your bill was $100.

  • Multiply the purchase amount by the reward rate: $100 x 0.02 = $2.

  • Consider any caps or limits: Some cards have a maximum reward limit per month or year. Ensure your calculated reward doesn’t exceed this limit.

  • Factor in bonuses: Some cards offer bonus points or cashback for reaching certain spending thresholds.

Keep in mind, some transactions won’t earn credit card rewards, including:

  • Balance transfers/balance transfer fees

  • Cash advances

  • Other cash-like transactions

  • Lottery tickets

  • Casino gaming chips

  • Race track wagers or similar betting transactions

  • Any checks that access your account

  • Interest

  • Unauthorized or fraudulent charges

  • Fees of any kind, including an annual fee

There’s no shortage of ways to redeem your credit card points. Here are some of the most common options:

  • Statement credit: A reduction or credit applied directly to your credit card balance.

  • Direct transfer to your bank: Transfer your rewards’ cash value directly into your linked bank account.

  • A check: A paper instrument issued by the credit card company representing the cash value of your rewards, which you can deposit or cash.

  • Gift cards: Preloaded cards that can be used for purchases at specific retailers or a group of retailers.

  • Tickets to events: Passes for events like concerts or sports games.

  • Charitable donations: Using rewards to make a monetary contribution to a nonprofit organization or cause.

  • Travel upgrades: Using points or rewards to enhance travel experiences, such as upgrading a flight seat or getting a room upgrade in a hotel.

  • Airline miles: Rewards that can be redeemed for flight tickets or discounts with specific airlines.

  • Hotel stays: Points or rewards that can be used to book accommodations in participating hotels.

  • Annual fee waivers: Using accumulated rewards to offset or cover the yearly fee associated with a credit card.

Choosing the best rewards credit cards began with the dozens of cards we’ve already ranked and rated. These ratings come from our proprietary criteria for the best travel credit cards (which includes points- and miles-earning rewards cards) and the best cash-back credit cards. The list above is made up of cards you’ll also find on each of those lists.

From there, we focused on categories that we believe offer a representative range of rewards cards as a whole. These include everything from best flat cash-back card to best premium travel card. This helped narrow down the rewards credit cards we already rated highly to a succinct list for new users and rewards chasers alike.

We also wanted to focus on credit cards that would make the most sense for the widest variety of users. So we did not include any co-branded airline, hotel, or retail credit cards. The final picks are made up of our top choices in the chosen categories that we believe can add value to anyone’s wallet and help those with the goal of maximizing their spending over the long term.

Editorial Disclosure: The information in this article has not been reviewed or approved by any advertiser. The details on financial products, including card rates and fees, are accurate as of the publish date. All products or services are presented without warranty. Check the bank’s website for the most current information. This site doesn’t include all currently available offers.

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