Reward Credit Cards of December 2024

What are Rewards Credit Cards?

Rewards credit cards offer cardholders a way to earn rewards for their spending. You can get a rewards card to earn reward dollars, points, or miles per dollar spent. The cards usually allow you to pay monthly cell phone bill, earn rewards on qualifying balance transfers and rental cars booked through the bank's services, and rotating bonus categories.

However, it's important to choose the right rewards card for your needs and to understand the fees and restrictions that may apply. Before applying for a rewards credit card, consider your spending habits and what type of rewards you're most likely to use.

Types of Rewards Credit Cards

Rewards credit cards in the USA are credit cards that offer various benefits to cardholders in exchange for their spending. Here are the most common types of rewards credit cards in the USA:

• Travel rewards credit cards offer benefits such as discounts on hotels and car rentals, waived foreign transaction fees, and other travel-related benefits for bonus categories. These cards are ideal for frequent travelers who want to earn rewards for their spending on travel-related expenses.
• Cash rewards credit cards offer cardholders cash back for their spending. Cardholders can earn cash rewards for everyday purchases such as gas, groceries, and dining or for more specific purchases such as travel or online shopping. Cash rewards can be redeemed for cash, statement credits, or merchandise.
• Point rewards credit cards offer cardholders points for their spending, which can be redeemed for travel, merchandise, gift cards, or other rewards. Points can be redeemed through the card issuer's rewards program or through an affiliated travel or merchandise portal.
• Hybrid rewards credit cards offer a combination of cash back and travel rewards. These cards allow cardholders to earn both cash rewards and travel benefits, such as discounts on hotels and car rentals or waived foreign transaction fees.

Pros and Cons of Rewards Credit Cards

Pros

• Enhanced spending power. Rewards credit cards provide cardholders with the ability to earn rewards for their purchases and balance transfers, making it easier to maximize their spending power. You can also get a sign-up bonus on eligible purchase categories.
• Rewards for eligible purchases. Rewards credit cards allow cardholders to earn cash rewards or other benefits for their eligible purchases. This can provide a valuable return on their spending and help to offset the costs of using credit.
• Flexible rewards. Rewards credit cards offer a range of benefits and rewards, including cash back, travel rewards, merchandise, and more. This provides cardholders with the flexibility to choose the rewards that best suit their needs and preferences.
• 0% Intro APR. Some rewards credit cards offer a 0% Intro APR on purchases and balance transfers, which can provide cardholders with a low-cost way to finance their spending and make it easier to manage their debt.
• Increased security. Rewards credit cards offer the same security features as traditional credit cards, making it easy to protect against fraud and unauthorized transactions.

Cons

• High interest rates. Rewards credit cards often have higher interest rates than traditional credit cards, making it more expensive to pay a balance from month to month.
• Annual fees. Some rewards credit cards have annual fees, which can reduce the net value of the rewards earned by the cardholder.
• Redemption restrictions. Rewards credit cards may have restrictions on how rewards can be redeemed, such as minimum redemption amounts, expiration dates, or limited redemption options.
• Complex rewards structures. Rewards credit cards often have complex rewards structures, making it difficult for cardholders to fully understand the benefits and rewards they can earn.
• The temptation to spend more. Rewards credit cards can create a temptation to spend more than you would otherwise, leading to increased debt and potentially damaging your credit score.
• Ineligibility for some rewards. Some rewards credit cards may have restrictions on the purchases that are eligible for rewards, making it difficult for cardholders to maximize the benefits they can earn.

What are the best rewards credit cards?

You can apply for rewards cards with big US banks, like Chase, Capital One, American Express, and Wells Fargo. The best options are Chase Sapphire Preferred, Discover It Cash Back, Wells Fargo Active Cash card, and the following cash back credit cards.

How can You Use Rewards Credit Cards?

Rewards credit cards can be a valuable tool for maximizing your spending and earning rewards for the purchases you make. Here are a few ways to use rewards credit cards in the USA:

• Hotels and rental cars. Rewards credit cards often offer bonus points or cash back on travel purchases, including hotels and rental cars. This can help you save money and earn rewards for travel expenses. For example, the Capital One Venture Rewards Credit Card has unlimited 2x miles on every purchase, which can be redeemed for travel expenses, including hotels and rental cars.
• Purchases and balance transfers. Many rewards credit cards offer a 0% Intro APR on purchases and balance transfers for a limited time. This can be a useful tool for consolidating debt or making a large purchase without incurring interest charges. For example, the Wells Fargo Propel American Express Card offers a 0% Intro APR on purchases and balance transfers for the first 12 months.
• Foreign transaction fees. Rewards credit cards often waive foreign transaction fees, making it more cost-effective to use your card when traveling abroad. This can help you save money on foreign exchange fees and earn rewards on your purchases. For example, the SavorOne Cash Rewards Credit Card offers unlimited 3% cash back on dining and entertainment purchases with no foreign transaction fees.
• Eligible purchases. To maximize your rewards, it's important to use your rewards credit card on eligible purchases. This could include everyday expenses such as gas, dining, and groceries, as well as travel and entertainment expenses. For instance, the Blue Cash Preferred Card from American Express has 6% cash back on US supermarket purchases and unlimited 3% cash back on US gas station purchases.

How to Get Rewards Credit Cards?

Getting a rewards credit card in the USA is straightforward, but it's important to understand the steps involved and what to look for in a card. Here are the steps to follow:

1. Review your credit. To get a rewards credit card, you'll need to have good to excellent credit. Before you apply for a card, review your credit report and make sure your score is in good standing. You can receive a free copy of your credit report once a year from each of the three credit bureaus.
2. Compare rewards cards.Once you've reviewed your credit, it's time to compare rewards credit cards to find the one that's right for you. Look for a card that offers the rewards you're interested in, such as cash back, miles, or points. Also, consider the card's annual fee, interest rate, and foreign transaction fee.
3. Apply for a card. When you've found a card that you like, it's time to apply. You can usually apply for a rewards credit card online in just a few minutes. During the application process, you'll be asked to provide personal information, employment information, and your Social Security number.
4. Wait for approval. Once you've submitted your application, it's time to wait for the approval. It usually takes a few days to a week to hear back from the issuer. If you're approved, the issuer will send you your card in the mail, along with instructions on how to activate and use it.
5. Start earning rewards. Once you've activated your card and made your first purchase, you'll start earning rewards. Make sure to use your card regularly and pay your bill on time to maintain good credit and maximize your rewards. You can redeem rewards for statement credit, cash back at U.S. supermarkets, and gift cards.

Getting a rewards credit card in the USA is a good way to maximize your spending and earn rewards for the purchases you make. By following these steps and understanding the benefits of rewards credit cards, you can find the card that's right for you and start earning rewards.