Are you on the hunt for a credit card that rewards you for using it?
Nearly every major credit card company offers consumers a rewards program of some kind.
Rewards programs are exactly what they sound like. They reward credit users for spending a certain amount or shopping at a specific store.
The best reward programs can give users gift cards, travel miles, and even statement credit!
In this post, we discuss how to choose the best rewards credit card.
1. Know the Types of Rewards
There are several kinds of rewards programs when it comes to credit cards. Knowing these different types can help you make the appropriate decision.
Cash back credit cards reward users with cash for certain spending habits.
This cash can be deposited into your bank account. It can also be applied to an existing credit card bill as a statement credit.
Airline rewards credit cards grant users points for spending habits. These can later be translated into airline “miles,” which can be applied to flight or travel costs with that airline.
Lastly, hotel rewards cards enable users to earn points that can later be used at certain hotels.
2. Know Where You Shop
Take a moment to think about how you predominantly use your credit cards. Do you use them to pay for everyday costs, like groceries and fuel?
Do you use them to cover larger expenditures, like travel? Or are you more sporadic in how you use your cards?
Identify where you like to shop and where the bulk of your credit spending occurs. This can help identify which type of rewards program will suit you best.
For example, if you use credit cards only to pay for groceries, a rewards program that gives extra cash back for grocery store spending may be the way to go.
3. Understand the Eligibility Terms
Every credit card rewards program is different. It’s important to understand the terms of usage before you request a specific card.
For example, some rewards cards require a minimum expenditure. Some cap cash back at a certain limit, such as $1,000 in spending at a specific locale.
You may also have to have a certain type of credit to be eligible for a rewards card. The more competitive rewards cards will require good to excellent credit scores.
We recommend requesting a copy of your credit report to know where your credit score lies.
Curious about how credit scores are calculated? We have answers.
4. Consider Signup Bonuses
Some credit cards have signup bonuses. These often grant users statement credit for spending a certain amount within the first three or six months of enrollment.
This can be quite valuable, even if the card offers only moderate rewards. Keep these signup bonuses in mind as you weigh the pros and cons of different cards.
Finding the Best Reward Programs
If you’re searching for credit cards with the best reward programs, be sure to know your reward preferences ahead of time. Think about the type of program that makes sense for you, given your spending habits and needs.
Also, consider signup bonuses and eligibility requirements. It’s important to ensure you are eligible for a card before requesting one!
While you’re at it, check out our recommendation for the best rewards cards available to users currently.