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Credit Card Rewards: Which are Right for You?

Published October 21, 2020

5 minute read

Joshua Williams

By Joshua Williams

Not all credit cards have rewards programs, but if you’re lucky enough to hold a credit card that does, you can take advantage of some pretty interesting rewards. Imagine earning free travel opportunities, concert tickets, a flat-screen television, or even help with your college tuition, mortgage payment or retirement fund. Before you sign up for a rewards program, you should check the facts, look at the interest rate and compare yearly membership fees.

Capital One No Hassle Cash Rewards Card

The Capital One No Hassle Cash Rewards card has no monthly membership fee.

You can earn two percent back whenever you use your card to pay for gas and groceries. You earn one percent for all other purchases. You can apply your rewards to your balance or request cash back in the form of a check or gift card. The catch is that you need to have flawless credit and you pay a 14.9 percent ongoing APR.

American Express Platinum Card

The Platinum Card from American Express has no APR, but requires you pay a yearly membership fee of $450 and maintain immaculate credit.

The Platinum card earns you one point for every dollar you spend. It offers double points for online airfare booking and a 25,000 point bonus every time you spend $1000 a month or more over a three month period.

You can use your points rewards for travel, concierge service, resort and boutique benefits and entry into exclusive events.

Capital One MTV Visa Rewards Card

Capital One’s MTV Visa Rewards card rewards members with five points for every dollar. These points can be used for entertainment, video game rentals and purchases, music and concerts, and sporting events. You get two points for dining out, fast food and coffee shop purchases and one point for all your other purchases.

There’s no yearly fee, and you only need to have good credit, but there is a 16.9 percent APR. They also reward you with a 25 point bonus every billing cycle you keep your account in good standing.

American Express Preferred Rewards Gold Card

If shopping is your thing, you can earn cash rewards and shopping points with the American Express Preferred Rewards Gold card.

With a $125 annual fee and no APR, those with excellent credit can earn one point for every dollar they spend. When you spend $500 in a three-month period, you get 10,000 points redeemable for a $100 gift card. You can use your points on shopping, entertainment, and exclusive sporting event and concert tickets.

Wells Fargo Propel American Express

Here’s a great choice for travelers (well, when international travel becomes a normal thing again). The Wells Fargo Propel Amex offers no annual fee, a 0% introductory APR, and oodles of points. You’ll get 3X points on dining out and ordering in, as well as gas, rideshares, and transit. You’ll also score big on hotels, flights, and car rentals. You also won’t be charged any extra fees for purchases made outside the U.S. — a great perk for frequent travelers. The only real downside is that you have to redeem a minimum of 2,500 points at a time, and the balance transfer terms aren’t ideal.

Blue Cash Preferred American Express

If you have a growing (and hungry) family, you may want to check out the Blue Cash Preferred Amex card. It offers 6% back on groceries, up to $6,000 a year. It also offers 6% back on streaming services and 3% back on gas and transit (including rideshares). There’s a $300 welcome bonus if you spend $3,000 within the first six months. The annual fee is waived for the first year, but it’s $95 afterwards. There’s a 0% APR for the first 12 months (except on balance transfers).

Amazon Prime Rewards Visa Signature

Are you addicted to Amazon? This Visa card might be just the thing for you. There is no annual fee, which is a nice bonus. However, you are required to be an Amazon Prime member to reap the rewards. You’ll get 5% back from shopping at Amazon.com and Whole Foods stores, plus 2% back at most restaurants, gas stations, and drug stores. You’ll also get $100 Amazon gift card when you are approved, with no spending requirement. It’s yours to spend right away!

A Few More Things

We’ve listed some solid examples for you to get started. However, those four options are hardly the only rewards cards available. There are dozens — even hundreds — of options. Be sure to research the possibilities available to you before you choose a card. Here are some other factors to consider.

Your Lifestyle

These days, it feels like there is a credit card rewards program for every niche. If you’re a busy parent of a large family, you might want to look into cards that offer major discounts or cashback on groceries. If you love to travel, find a card that offers air miles or hotel discounts to help with you future adventures. If you love going to the movies, attending concerts, or buying the newest electronic gadget, there’s probably a rewards card that suits your need. Don’t settle for air miles if you’re afraid of flying. Don’t accumulate discounts to sporting events if that’s not your thing. What we’re saying here, is that it pays to find a rewards program that you’ll actually enjoy using.

Your Credit Card Habits

As you’ve seen, every rewards card is a bit different. Some include annual fees, while others don’t. Some have much higher interest rates, while others are more forgiving. How you use your credit card plays a factor into which one you should get.

For example, if you use your card sparingly, it probably doesn’t make sense to pay $450 in annual fees in exchange for the meager rewards you’ll earn over 12 months. You’d need to use your card for EVERYTHING to earn enough rewards to offset those fees.

Similarly, if you often find yourself carrying a balance over from month-to-month, those interest charges will eat up any rewards earned in almost no time. Don’t bother trying to accumulate points or miles if you can’t pay the balance off every 30 days. You’re just losing money.

The Fine Print

You’ve probably seen the commercials where one travel miles plan tells you that their competitors are too strict. They have airline restrictions, seasonal restrictions, black out dates, and a whole host of other terms and conditions. While you can probably dismiss those commercials as “attack ads,” there is a simple truth behind them:

“Make sure you know all the details of your reward program!”

If you’re saving miles for that life-long dream of a trip to Italy, you’ll be disappointed if you realize the airline partners of your reward program don’t fly there. Or that you can’t use your rewards for a family vacation to Disney, since it’s not a qualifying resort company. These are just random, hypothetical examples. Our point is that every credit card rewards program is slightly different, so make sure you know exactly what you’re signing up for.

Final Thoughts

There are literally dozens of rewards programs, each designed to benefit the lifestyle of the cardholder. In most cases these days, you can apply right online and get a notice of approval in 60 seconds. For nearly every program, you do need to have good to excellent credit, otherwise, you won’t be approved.

Do your research before you jump on the first offer you find. Every credit card company has a variety of different cards and rewards programs, so find the right one to suit your style. If you can find a good rewards program with a low annual percentage rate, no annual fee, and great rewards, taking advantage of the card responsibly can keep your credit score on the high end while earning you some really cool perks.

Credit Card with Star Points

Letters-Shmetters / Shutterstock

Joshua Williams

Contributor

Joshua is a freelance writer with years of experience blogging about business and finance, and a whole host of other things too. When he's not writing, he enjoys camping with his dog, a golden retriever named Oakley.

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