Best Credit Card Reward Programs

If you have average to excellent credit (a score of around 620-850), you’ve probably gotten card offers in the mail. The average American consumer already has two or three cards, and issuers are competing to penetrate an already saturated market.[1] Having more than one credit card might seem a big step, but issuers want you to have more, and they're more than willing to offer something in return for your signing up with them.

Competition for customers has produced a large number of rewards programs, which get seemingly more lucrative and more inventive each year. Travel miles are still commonplace, but many companies now offer rewards programs that include cash back, discounts on gas and other products, and much more. It's difficult to pin down every possible reward out there, as many local banks offer region-specific rewards. While it can be difficult to wrap your head around this new market, some companies simply do offer the best rewards programs around.

Here’s a look at some of the top reward programs.

What's The Value Of A Rewards Program?
If you're new to the wonderful world of plastic, the idea of a rewards program might seem strange. Your regular debit card doesn’t provide you with any rewards for using it. Companies are essentially loaning you money with each purchase and making a small amount off each buy. Here's the real kicker: if you pay your bill in full at the end of each month, the company isn't making any money from you. The small fee they collect comes from the merchant, not the buyer. Users only have to pay a fee if they have any outstanding balances, essentially paying a late fee for a loan you failed to pay it back in time.

Rewards Programs are special offers that you get for actually swiping the plastic. As we stated earlier, this could be anything, but it often involves a points system that's directly transferable to cash or other items. Many rewards programs relate dollars spent to credit points on a 1-to-1 basis, or a percentage basis (e.g., 1 percent to 5 percent back on certain items). For example, a flat 1% cash back on all purchased items means you'll be making $1 back for every $100 you spend. Rewards do matter to consumers. In 2015, 52% of users surveyed said they chose a new card for the rewards program, and 24% said they chose one for better benefits.[2] Some studies have found that consumers who have rewards programs spend twice as much on their cards each month compared to those without rewards programs.[3] That’s why companies offer rewards: they get customers to use the card more often, which earns more money for the company.

These figures may seem surprising at first, but they make financial sense. A good rewards program combined with sufficient monthly payments can save quite a bit of money in the long run. Of course, there are different types of programs, and the type that suits you best will depend on your spending patterns. Let's look at the top contenders in major categories.

Best Cash Back Rewards Card
The Citi Double Cash® card takes top honors in this category with one of the best cash back benefits programs, especially for those who spend substantial amounts. Most cards with higher cash back percentages have quarterly or yearly limits. The Citi Double Cash has no limits, and you double your money back if you pay on time! There's no annual fee, no spending limits for rewards, and no interest for the first 18 months, with a variable Annual Percentage Rate of 15.24% - 25.24% after that.

The Catch: You'll need to pay your bills on time to benefit from this program. There are no other benefits beyond the double cash back, and you can only redeem your cash back after you earn $25 in rewards (requiring a minimum of $2,500 in spending).

Best Travel Miles Rewards Card
The Capital One Venture® is the leading contender in this category and will be a top option for frequent fliers. While this rewards card offers you fewer bonus miles than some competitors, you also don't need to spend as much to gain those bonus miles. It also has a much lower interest rate than those of its immediate competitors, making it better for those who carry a balance. You earn 2 miles for every dollar you spend on purchases (with 100 miles equivalent to $1 in travel rewards) with no limit. You also receive a 50,000-mile bonus in travel (equal to $400) if you spend $3,000 in the first three months. Rewards are easy to redeem and don't expire. The APR is 14.24%-24.24%.

The Catch: You'll need excellent credit to qualify for this rewards card, and there's a $95 annual fee after the first year. Their program focuses strictly on travel miles, so you should look elsewhere if you're looking for a more diverse program.

Best Everyday Spending Rewards Card
If you do most of your spending in supermarkets and gas stations, you’ll want to look closely at the Amex EveryDay Preferred®. This card features a point-based reward system that offers triple points in supermarkets (up to $6,000/year) and double points at gas stations. If you use it more than 30 times in a billing period, you earn 50% more points on those purchases! You can redeem points at over 500 major retailers and get double membership rewards on eligible travel purchases. There are also extensive benefits for travel, shopping, and entertainment. It’s hard to beat the Amex points system: If this becomes your general-purpose card, you'll likely make that 50%-point boost during every billing cycle. Point values differ depending on where you're using them, but in many cases, 10,000 points are equivalent to $100. The APR is 0 for the first 12 months, a variable 14.74% to 24.74% after that, and there's a $95 annual fee.

The Catch: The Point values vary, so you'll have to choose how to use those points to get the maximum benefit.

Best Regular Shopping Rewards Card
For general shopping use, it's hard to beat the Chase Freedom®. This card offers you a huge 5% cash back on purchases in categories that rotate quarterly (within a limit of $1,500/quarter) and 1% on all other purchases. Rewards do not expire. What’s more, you get a $150 bonus once you spend your first $500 in the three months after you've opened your account. There's no annual fee, and the APR is 0% for the first 15 months, and 16.74%–25.49% after that.

The Catch: You can't pick where that 5% applies each quarter. Sometimes it applies to regular shopping, other times to places such as restaurants and gas stations. There is also a $1,500 limit per quarter, keeping the maximum 5% cash back to just $75 per quarter.

Haven’t found your perfect rewards card? Don’t worry! There are many other types of reward programs, and you'll have to base your choice on your spending patterns. These are some of the most common categories, though, and the choices here give you an excellent place to start!

See them here:

Citi Double Cash Back®

Capital One Venture®

Amex EveryDay Preferred®

Chase Freedom®

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